1 76EAASEPA1 Argument 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK 2 ------------------------------x 2 3 IN RE SEPTEMBER 11TH 3 LITIGATION, 4 5 21 MC 97 6 ------------------------------x 6 New York, N.Y. 7 June 14, 2007 7 10:15 a.m. 8 8 Before: 9 9 HON. ALVIN K. HELLERSTEIN, 10 10 District Judge 11 11 APPEARANCES 12 12 MOTLEY RICE 13 Attorneys for Plaintiff 13 BY: DON MIGLIORI 14 MICHAEL E. ELSNER 14 BY: GREGORY P. JOSEPH LAW OFFICES, LLC 15 Attorney for Plaintiff 15 16 FLEMMING ZULACK WILLIAMSON ZAUDERER, LLP 16 Attorneys for Plaintiff 17 BY: RICHARD A. WILLIAMSON 17 18 CLIFFORD LAW OFFICE 18 Attorneys for Plaintiff 19 BY: TIMOTHY S. TOMASIK 19 20 U.S. DEPARTMENT OF JUSTICE 20 Attorneys for Plaintiff 21 BY: BETH GOLDMAN 21 SARAH SHEIVE NORMAND 22 JEANNETTE VARGAS 22 23 AZRAEL GANN & FRANZ, LLP 23 BY: KEITH S. FRANZ 24 24 25 KREINDLER & KREINDLER, LLP 25 Attorneys for Plaintiff SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 2 76EAASEPA1 Argument 1 BY: MARC MOLLER 1 2 CONDON & FORSYTH, LLP 2 Attorneys for Defendant 3 BY: DESMOND T. BARRY, JR. 3 4 DEBEVOISE & PLIMPTON, LLP 4 Attorneys for Defendant 5 BY: ROGER E. PODESTA 5 6 SIMPSON THACHER & BARTLETT, LLP 6 Attorneys for Defendant 7 BY: JOSEPH F. WAYLAND 7 8 O'MELVENY & MYERS, LLP 8 Attorneys for Defendant 9 BY: MARK WOOD 9 10 PERKINS COIE, LLP 10 Attorneys for Defendant 11 BY: MARY P. GASTON 11 MACK H. SHULTZ 12 12 QUIRK AND BAKALOR, P.C. 13 Attorneys for Defendant 13 BY: JEFFREY J. ELLIS 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 3 76EAASEPA1 Argument 1 (Case called) 2 THE COURT: Good morning. Please, be seated. 3 I want to thank Mr. Barry and Mr. Moller for helping 4 organize the activities today, and we will follow the agenda 5 that has been distributed. There are four main issues about 6 which we will have discussion. 7 The first, whether federal law pre-empts state law 8 concerning the standard of care applicable to the aviation 9 defendant's conduct. 10 The second, whether punitive damages are available. 11 The third, whether aviation defendants should be able 12 to discover from the government preSeptember 11th intelligence 13 and other threat information known to the government but not 14 conveyed to the aviation defendants. 15 And fourth, whether Pennsylvania law should apply to 16 United Airlines flight number 93 compensatory damages claim. 17 Those are the four issues. Have we missed anything 18 that someone else has raised in motions? 19 There will be no time limits. We will discuss each 20 issue in turn until the discussion has been completed. 21 Sometimes the hearer of a discussion completes his 22 hearing before the transmitter of information completes the 23 transmission, and if there is that dichotomy we will try to 24 deal with it as best we can. 25 On the first issue having to do with the standard of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 4 76EAASEPA1 Argument 1 care, Mr. Podesta for the aviation defendants will speak first. 2 Ms. Gaston for Boeing will speak second. Mr. Wood for the 3 airport operators will speak third. Now, I think much of what 4 Mr. Wood would probably be covering will be covered by 5 Mr. Podesta and Mr. Joseph will speak for the plaintiffs. 6 As you know this judge has a bit of impatience in 7 argument and has the habit of cutting in and entering into 8 dialogue before the presenter may be finished. I'll try to 9 discipline myself more than usual this morning. 10 Mr. Podesta, there's lot of people here. I don't know 11 how adequately the room is mic-ed. If anyone in the back can't 12 hear, please, raise your hand. We will raise our voices, but I 13 want everyone here to be able it to hear and pay attention. 14 Mr. Podesta. 15 MR. PODESTA: Good morning, your Honor. 16 Roger Podesta, for American Airlines on behalf of the 17 aviation defendant's motion for determination of the federal 18 aviation security regulations established the standard of care 19 governing their conduct on 9/11. I'd like to reserve with the 20 Court's permission a couple of minutes for rebuttal. 21 THE COURT: We will have interchange. There is no 22 time limits. We will leave that to the Court of Appeals. They 23 have lights. 24 MR. PODESTA: I will try to focus my argument on a few 25 key highlights and rely on my colleagues and the briefing for SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5 76EAASEPA1 Argument 1 most of the points. I don't want to argue so long that Judge 2 Griesa starts knocking on the door. 3 The main theme for my argument this morning, your 4 Honor, is that the issue before you on this motion is 5 essentially one of statutory interpretation. And its 6 interpretation not so much of the Federal Aviation Act but of 7 the Stabilization Act or ATSSA Congress specifically created 8 for purposes of the 9/11 litigation. 9 And even more precisely the issue is what did Congress 10 mean when it wrote in Section 408 B 26 ATSSA that the 11 substantive law for its new federal cause of action was to be 12 derived from the law of the state where the crash occurred 13 unless such law is inconsistent with or pre-empted by federal 14 law. 15 Now, plaintiffs tend to read Section 408 B 2 as if the 16 sentence stopped with the words "where the crash occurred" and 17 attribute little significance to the remainder of the sentence. 18 They argue that inconsistent with is just another way 19 of saying conflict pre-emption and that there is no preemption 20 here at all because the federal regulations only establish 21 minimum standards. But we submit that that ignores the basic 22 principal. Then in construing statutory language courts ought 23 to strive to give meaning to every word in the statute. 24 And under that cannon of construction the worlds 25 inconsistent with and pre-empted by should each be given SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 6 76EAASEPA1 Argument 1 independent meaning. And I would suggest that plaintiff's 2 position also fits poorly both the text of Section 408 B 2 and 3 the context of the enactment of the Stabilization Act. 4 When you look at it the phrase pre-empted by 5 inconsistent with or pre-empted by is a uniquely powerful 6 combination of terms. As far as the parties research has 7 revealed Congress had never once used that combination of terms 8 inconsistent with or pre-empted by in any federal statute prior 9 to 9/11. 10 THE COURT: It seemed to me, Mr. Podesta, that the 11 latter phrase raises an issue of intent. On the former phrase 12 raises an issue of logical inconsistency. That is to say if it 13 was the intent of a particular statute and perhaps regulation 14 to pre-empt state law. That is expressive of an intent by 15 Congress to supersede state law by federal law. The issue 16 raises congressional intent and the supremacy clause. The 17 phrase inconsistent with would suggest that the operation of a 18 state statute or common law standard would be inconsistent with 19 the federal standard. Again, the issue is the supremacy clause 20 of the Constitution. But it's a feature other than specific 21 intent and it then goes beyond normal pre-emption law which 22 normally takes in both standards but deals with a first 23 inconsistent with as a suggestion of the second congressional 24 intent. Here they're made independent. 25 MR. PODESTA: I would say that the pre-emptive by SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 7 76EAASEPA1 Argument 1 language refers to the normal pre-emption principles which are 2 both expressed and implied occupation appealed and conflict 3 pre-emptions and inconsistent with is really an expansion of 4 those concepts in the operation and that what really -- 5 inconsistent with is really stating, inconsistent with is a 6 softer word than conflict or direct conflict. 7 THE COURT: I think your point is that it connotes 8 something more than normal pre-emption. 9 MR. PODESTA: Yes, that is correct. 10 THE COURT: That the ATSSA is intended to have a more 11 inclusive effect superseding state law more than would 12 otherwise be the case in normal pre-emption analysis. 13 MR. PODESTA: That's correct. If Congress wished to 14 confine the analysis under this statute simply to the 15 traditional principals of expressed or implied pre-emption it 16 could simply have said pre-empted by. But it said inconsistent 17 with pre-empted buy. And to my way of thinking, the way I read 18 the English language that involves a less lower level of 19 conflict between the federal and state interests is required 20 for federal law to control than it would be if it were purely a 21 conflict pre-emptive issue and I think when you look at the 22 text of the statute derived from state law -- 23 THE COURT: Let's say you've persuaded me of this 24 point, let's move on and see where it goes. 25 MR. PODESTA: All right. Then I would say if Congress SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 8 76EAASEPA1 Argument 1 puts those words inconsistent with or pre-emptive by I think it 2 is hard to avoid the conclusion that in drafting that language 3 Congress must have intended that there was some body of state 4 law that would apply and some aspects of state law that would 5 be displaced. 6 THE COURT: Not necessarily. It could be 7 hypothetical. It could be an expression of Congress that if 8 there is a straight standard that is inconsistent with the 9 ATSSA that state law won't be applied. 10 MR. PODESTA: That, hypothetically, that hypothetical 11 possibly possibility exists. But Congress I think I'll try to 12 persuade you that Congress was aware that there was an 13 extensive body of federal regulations in the aviation security 14 industry. 15 THE COURT: I think everyone will agree that there is 16 extensive occupation in the field by Congress. 17 MR. PODESTA: And I would think that it's also logical 18 to conclude that if Congress meant to displace, to adopt any 19 body of federal law it would be the detailed aviation security 20 regulations such as the ACSSP the cog and the provisions of the 21 Federal Aviation Act. I suggest that if you step back from the 22 statutory language and forget about the verbiage of the brief 23 what the statute is really saying and being -- is where state 24 and federal law cover the same subject matter and the state law 25 is appreciably different than the federal, then the state law SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 9 76EAASEPA1 Argument 1 yields to the federal and the federal controls. 2 THE COURT: Mr. Podesta, I think the trouble with 3 urging that point and persuading me of that point is it's too 4 general, and as a judge I really occupy the position of an 5 educated layman. I don't know the term. I don't know the 6 specific areas. I don't know the techniques and the technique 7 of the legislation, so I would like you as an experienced 8 lawyer in this area to lead me through it. I take your first 9 point. There is something more in ATSAA than normal 10 pre-emption analysis but I am anxious to see where that goes. 11 MR. PODESTA: All right. I think one key clue to what 12 Congress meant is the situation in which it was acting on 9/11. 13 Congress obviously wanted to centralize all of the 9/11 14 litigation in a single court and it could only do that by 15 citing a federal forum, but it had a problem. There are 16 several Supreme Court decisions that is pointed out serious 17 constitutional issues with Congress, just taking stated court 18 cases and bringing them into a federal court under a purer 19 jurisdiction statute. So in order to avoid the constitutional 20 issues Congress had to create a federal cause of action that 21 gave rise to another problem. 22 There is no preexisting federal common law of torts to 23 which Congress could readily make reference. So what it 24 decided to do, rather than create its own new body of federal 25 tort law from scratch, was to borrow the pre-existing body of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 10 76EAASEPA1 Argument 1 state authority law from the law of the state of each crash. 2 But I suggested it didn't disregard the federal regulatory 3 scheme, but what the last phrases of Section 48 B 2 really are 4 saying is that where there is pre-existing federal law on point 5 there is no need to borrow from the state common law and 6 federal law controls over the state law. 7 Now, I'd suggest that that is the most logical 8 interpretation of what Congress was doing, but I am sure the 9 plaintiffs will say where is your proof? 10 THE COURT: Mr. Podesta, I have to say you I want to 11 step back from your point as well. We don't know what Congress 12 had in mind because the legislative history of ATSSA is sparse 13 to nonexistent. So we take the statute and we try to 14 understand what the words say and mean and how far they may be 15 applied. It is quite possible and I think probable that the 16 legislators had in mind standards of care that customarily are 17 addressed by the common law of the several states. And the 18 overlay of extensive regulation in the federal statutes and 19 regulations book and would depend on the courts to bring those 20 several bodies together and make sense of them, noting the 21 federal supremacy, particularly, in the breath of the wording 22 that we discussed a few minutes ago. But dealing with 23 standards of the common law as well as the regulatory book. 24 That's how I would approach the subject. 25 MR. PODESTA: I think the common law standard is SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 11 76EAASEPA1 Argument 1 basically one of reasonableness and I think what Congress is 2 saying in the last clause is where there is a federal 3 regulation that told the aviation defendants what they were 4 supposed to do. That is the reason. That supplies, answers 5 the questions what is reasonable under state law in the 6 circumstances of the federal regulatory -- 7 THE COURT: I would say it provides answers but it may 8 not answer. 9 MR. PODESTA: All right. 10 THE COURT: I'd like to move from the abstract to the 11 actual. I'd like to deal with the specific federal statutes 12 and regulations that may be applicable here and look at their 13 text and see if we can apply the ATSSA their text. 14 MR. PODESTA: All right. But I would just like to 15 make one more point and that relates to the Price Anderson Act. 16 Congress had faced an identical problem. 17 THE COURT: Price Anderson Act for those who may not 18 know is the congressional regulation that deals with the atomic 19 energy developments in the 1960s, in particular. I don't 20 remember the date of the statutes. 21 MR. PODESTA: These are the 1988 amendments. This is 22 Congress's final solution to the problem. In the Price 23 Anderson Amendment Acts Congress created, as it did in that 24 statute, an exclusive federal cause of action and provided that 25 the substance of the federal cause of action for nuclear power SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 12 76EAASEPA1 Argument 1 plant accidents was to be derived from the law of the state 2 where the accident occurred except where that law was 3 inconsistent with federal law. And because of the sparseness 4 of the legislative history I can't point to something and say 5 Congress specifically considered this but think of this as if 6 it were a federal case. I don't have an eyewitness that would 7 say the Price Anderson Act was present at the creation of the 8 Stabilization Act. 9 THE COURT: It was a model. 10 MR. PODESTA: I've got something better. I've got 11 effective the statutory DNA of the Price Anderson Act is 12 present in the Stabilization Act that you look at the structure 13 and language of the two statutes they're too strikingly similar 14 for that to be a mere coincidence and Congress also had before 15 it on 9/11 -- 16 THE COURT: It also has similarities of function and 17 purpose. The Price Anderson Act reflected Congressional 18 concern that a catastrophe resulting from a nuclear accident 19 would ruin the industry and by the threat of a ruination 20 prevent proper development and investment in the field and so 21 Congress entered it with schemes of federal insurance and the 22 statute that you discussed. And I would take your point and 23 agree with it that it is a model that can be persuasive. 24 MR. PODESTA: There is an important nuance on that and 25 that is that Congress when it puts new language in the federal SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 13 76EAASEPA1 Argument 1 statutes is presumed to be aware of how that language that has 2 previously been interpreted by the courts. 3 THE COURT: I accept that as well. 4 MR. PODESTA: And as of 9/11 there was a unanimous 5 body of federal judicial opinions consisting of four different 6 federal circuit courts and at least 12 district courts 7 including Judge Cote in this district who had held that the 8 words inconsistent with in the Price Anderson Amendment Act 9 established an exclusive federal standard of care for assessing 10 the liability of nuclear power plant operators. And the courts 11 have also held that that standard of care was to be provided by 12 the regulations of the nuclear energy regulatory commission, 13 and that the issue in Price Anderson in that case is, did the 14 defendants comply with the provisions of the statute and the 15 nuclear energy commission regulations? If so there is no 16 liability. 17 In other words, the common law standard of 18 reasonableness is converted into compliance with the nuclear 19 energy regulatory commission regulations where there is a 20 nuclear energy regulatory commission regulation on point. And 21 that was the unanimous interpretation from four circuits and 22 Judge Cote as of the date Congress modeled the Stabilization 23 Act on the Price Anderson Act Amendment. 24 But let's move into the area of some specific examples 25 of inconsistencies and possible direct conflicts. I am SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 14 76EAASEPA1 Argument 1 focusing on and inconsistent with. That really reflect the 2 allocation of my argument with my colleagues. I certainly 3 endorse the pre-empted by arguments but I know Mary is going to 4 cover a lot of them and I -- 5 THE COURT: Mr. Podesta, I would like you to occupy 6 the field. 7 MR. PODESTA: Okay. Unfortunately, I think Mr. Joseph 8 is going to carve out an area that's not pre-empted for 9 himself. 10 But in our opening brief we provided numerous examples 11 of what the aviation defendants were required to do under the 12 federal aviations and compared them to what the plaintiffs' 13 theories of liability appear to be insofar as we can determine 14 them from the questions that the plaintiffs were asking our 15 witnesses at their depositions. 16 For example, plaintiffs appear to suggest that the 17 aviation defendants should have given special scrutiny to the 18 persons and the carry on baggage of CAPPS selectees. 19 THE COURT: Sorry. Say again. 20 MR. PODESTA: CAPPS. The computer had a number of 21 factors who determine the trying to select passenger who were 22 perceived as above high risk and over the years there was a 23 variety of FAA regulations telling the aviation defendants what 24 they were supposed to do with these CAPPS selectees. And it's 25 important here because I believe nine or ten of the hijackers SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 15 76EAASEPA1 Argument 1 were cab selectees. And plaintiffs are basically contending 2 that the common law of the states where the crash occurred 3 required the airlines and the screening companies to give 4 special scrutiny to the persons and the carry on bags of CAPPS 5 selectees. 6 Beyond that you would be given to a normal passenger. 7 In other words, you open every bag, hand wand or pat-down every 8 selectee. Now, the problem with that analysis is that it's 9 flatly inconsistent with the security directives that were in 10 place for CAPPS selectees on 9/11. 11 As of 9/11 the standard was set forth in security 12 directive -- I think it is a 9701, they all have these catchy 13 titles -- and that basically said that the only special 14 scrutiny that a CAPPS selectee was to receive on 9/11 related 15 to the checked baggage of the cab selectee, not to his person, 16 not to her carry on bags. They were all otherwise except for 17 their checked baggage same scrutiny as other passengers were to 18 receive. 19 There was good reason for that. It was largely a 20 product of the views of the Gore commission that basically was 21 concerned about ethnic, racial or religious profiling in 22 selection of passengers for screening. And it also is premised 23 on the assumption that the FAA and the Gore Commission both 24 made that the biggest threat was explosives, particularly, in 25 checked baggage because that had been the problem with Pan Am SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 16 76EAASEPA1 Argument 1 and was thought to have been the problem with TWA flight 800 at 2 the time these regulations took effect. So plaintiffs here 3 there have a direct inconsistency here. 4 THE COURT: Mr. Podesta, take me through the language, 5 please. I want to see the regulations. I want to you walk me 6 through the regulations. First, show me the special scrutiny 7 point and the general scrutiny point. I think that this is 8 extremely important -- and this a word to the rest of you -- 9 it's extremely important to work with the precise text of the 10 language that we're dealing with any analysis or inconsistency 11 has to deal with text and expressions. 12 (Pause) 13 MR. PODESTA: Well, this is to the easiest thing to do 14 live because the attachment that we're referring to is Exhibit 15 C to -- Exhibit D. I'm sorry -- to Mr. Barry's initial 16 affidavit. 17 Do you have it in front of you? 18 THE COURT: We will have it in a minute. 19 (Pause) 20 THE COURT: What is the regulation. 21 MR. PODESTA: Security direct 9701, security directive 22 and I don't think this is consist have the same binding affect 23 as FAA regulations. 24 THE COURT: This is a regulation issued by the 25 Department of Transportation, October 27, 1997. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 17 76EAASEPA1 Argument 1 MR. PODESTA: Yes. And although this particular one 2 expired March 1988. In fact, successors continued it through 3 September 11, 2001. 4 THE COURT: This is the one in effect as of September 5 11, 2001. 6 MR. PODESTA: That's right. And this is for CAPPS. 7 THE COURT: I noticed the TSA redactions. 8 MR. PODESTA: Yes. Well, that's an issue we 9 frequently have. But I think we can take you through the 10 meaning and I think probably for purposes of this argument make 11 sense to look at the revision summary and in the first page and 12 it says in the first paragraph this security -- 13 THE COURT: I don't know if there are any reporters 14 here who want to have the benefit of this information, but my 15 staff will work with you afterwards to allow you to see the 16 information that may not be readily available to you to get the 17 story straight. 18 MR. PODESTA: You'll see first bullet point, your 19 Honor, says this security directive allows for the use of an 20 FAA approved computer assisted passenger screening CAPPS system 21 to profile passengers. And the very second bullet point 22 requires profiling of only, in bold face, those passengers 23 checking baggage. 24 THE COURT: It doesn't say the checked baggage. It 25 says the passengers checking bags. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 18 76EAASEPA1 Argument 1 MR. PODESTA: That's right. Then if you turn to the 2 third page it talks about actions required by U.S. carriers and 3 then it goes through the requirement of a profile and then it 4 says, A, the checked baggage belonging to a passenger is 5 identified as selectee using CAPPS shall be cleared using one 6 of the procedures outlined in section four. Then it goes on -- 7 THE COURT: So what I understand from this is that the 8 focus is on the checked baggage. 9 MR. PODESTA: Correct. 10 THE COURT: Your point is that the experience at 11 Lockerbie and other places showed dangers and risks in the 12 checked baggage. 13 MR. PODESTA: Yes. And this is confirmed by the 14 findings of the Kane Commission which said that the only effect 15 of the CAPPS profiled select system on 9/11 was as to checked 16 baggage and I think it is like page 846 the Kane Commission 17 interpreting those regulations that CAPPS selectees on 9/11 18 were to be subject to no special scrutiny for their persons or 19 for their carry on bags. 20 But there are many other examples that I can give you, 21 your Honor, of inconsistencies between what they think the 22 plaintiffs are claiming. 23 THE COURT: Let's talk about this. This has a certain 24 degree of force. What is the force of a security directive? 25 MR. PODESTA: A security directive has the affect of a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 19 76EAASEPA1 Argument 1 federal aviation administration regulations. It has the 2 binding effect of law and that was also noted by the Kane 3 Commission in their report. It is to be distinguished from an 4 information circular which simply provides the aviation 5 defendants with information about possible terrorist threats 6 but doesn't require them to do anything. 7 THE COURT: Now, you read this, Mr. Podesta, and I 8 think it is a fair reading of it, that this is an instruction 9 to those responsible for checking people coming into the 10 airplanes, that if a person exceeds the profile and therefore 11 is a potential security risk, the focus of attention should be 12 on the baggage and not on the person. 13 MR. PODESTA: Checked baggage. 14 THE COURT: And not on the person or the hand carry 15 baggage. So this is what the instruction is, it's binding 16 instruction. It instructs everyone. I'll put a hypothetical 17 to you. Those responsible for security are concerned about a 18 risk and suspect a certain person. Are they forbidden to have 19 a more rigorous review of that person, inspection of that 20 person and that which he carries than they would do if you or I 21 assuming we are boring persons go through a checkpoint. 22 MR. PODESTA: It would depend. The answer is as a 23 general matter under the federal regulations all passengers are 24 to be given the same degree of scrutiny. Only exception is for 25 CAPPS -- SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 20 76EAASEPA1 Argument 1 THE COURT: They say all persons other all categories 2 of persons? I put the question -- 3 MR. PODESTA: They talk generally about persons 4 passing through the screening checkpoint. 5 THE COURT: Is a checker forbidden to have a more 6 rigorous inspection? 7 MR. PODESTA: I would say that there is an element, of 8 course, of common sense in the federal regulations which 9 doesn't mean they're superseded by state law standards, but if 10 someone comes in and is acting dramatically suspicious is 11 intoxicated or says I have a bomb or starts being belligerent 12 and fighting with people, obviously, the screener would have 13 the authority to take a special look at that person. 14 THE COURT: Do we know and can we say publicly what it 15 was about nine of the ten people that made them more 16 suspicious? 17 MR. PODESTA: I can say publicly. 18 THE COURT: Let me talk to you about that for a 19 moment. There is a precise issue that can be drawn here. It's 20 wrong to profile people by racial type or ethnic type, perhaps, 21 other forbidden categories. But it makes sense when you are 22 suspicious about a person -- than his ethnic or her ethnic make 23 up to have a more rigorous standard. Do we have to know in 24 this case what were the bases of suspicion about these nine 25 people? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 21 76EAASEPA1 Argument 1 MS. GOLDMAN: The perhaps selection process is 2 computer generated selection process, so it wasn't man made. 3 It was done by the computer. So I think that that plays -- 4 THE COURT: In other words, there were criteria that 5 if noticed would have raised suspicion about these nine people. 6 MS. GOLDMAN: Correct. 7 THE COURT: And are the criteria based on mannerisms, 8 can you say, or are they based on matters that various among us 9 with consider improper profiling characteristics? 10 MS. GOLDMAN: I'll start by explaining that the CAPPS 11 criteria themselves that I think your Honor understands are SSI 12 and that's why we're not discussing what they are. 13 THE COURT: Sensitive security information. 14 MS. GOLDMAN: But your Honor should understand that 15 the CAPPS program was submitted to the Department of Justice 16 for review to ensure that it was not a violation of any civil 17 rights laws by putting it into place, and I think that's 18 probably what I can say right here. This is an issue that is 19 going to be, I think, an element of discussion among the 20 parties in discovery. So it may be premature for us to give 21 you factual information at this point about the nature of this 22 but -- 23 THE COURT: I think we have crossed that, Mr. Podesta. 24 MR. PODESTA: I would note, your Honor, that the CAPPs 25 selection is a computer system. It has nothing, whatsoever, to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 22 76EAASEPA1 Argument 1 do with how the passengers behaved when they presented 2 themselves on the airport because the computer has no way of 3 knowing how they are conducting themselves, and there is also a 4 random selection. So some people are selected for no run 5 reason at all other than we want to select a random election 6 and others are selected because of their particular information 7 about them in the computer. 8 THE COURT: What can you say about these nine people 9 in terms of how they presented themselves, whether they were 10 noted as designees under CAPPS, whether their baggage was 11 scrutinize, whether their hand luggage was not? 12 MR. PODESTA: I believe that all of the CAPPS 13 selectees were subject to the required procedures under 14 security direct 970 and its successors. Now, if they didn't 15 have any checked baggage and a number of them didn't, the 16 designation of selectees really has no consequences. If they 17 did have checked baggage the checked baggage was handled in 18 accordance with the regulations which varied, I think, a bit. 19 THE COURT: What you are telling me is there was no 20 heightened scrutiny given of these nine in relationship to 21 their persons or their hand luggage in relationship to what 22 might be given to all others. 23 MR. PODESTA: I believe that is correct, your Honor, 24 and I think -- 25 THE COURT: And the plaintiffs would argue that it was SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 23 76EAASEPA1 Argument 1 negligent to do that and the question is how do we articulate 2 the standard that would be instructed the jury. 3 MR. PODESTA: The standard in terms of CAPPS selectees 4 we would argue the standard is whether we met the requirement 5 set forth in the federal regulations. CAPPS selectee program 6 was created by federal regulations that was exclusively a 7 federal creation and the question of whether we were negligent 8 in applying CAPPS is a question of whether we substantially and 9 reasonably complied with the federal CAPPS regulations. 10 THE COURT: So what would be the consequence of your 11 motion? Suppose I granted your motion. What difference would 12 it make in the trial? 13 MR. PODESTA: I think that we, I believe that the 14 instruction if our motion were granted --The standard of care 15 that the aviation defendants were expected to follow on 9/11 16 was established by federal regulations. Those regulations and 17 I guess you would read the pertinent ones -- 18 THE COURT: What would really be taken by the jury, 19 the gut of it would be that there was not to be any greater 20 scrutiny of a person who was identified by CAPPS except for his 21 checked baggage. 22 MR. PODESTA: That is correct, beyond what an ordinary 23 passenger would receive. You want me to instruct that as a 24 matter of law. That would be the instruction. I think that 25 could be the instruction as a matter of law. Then the question SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 24 76EAASEPA1 Argument 1 of fact for the jury would be whether the aviation defendants 2 substantially collide with the federal aviation and whether any 3 breach of that regulation was a proximate cause of the 4 plaintiff's injuries. 5 THE COURT: I'm going to take the liberty of a judge. 6 Keep you in place and ask Mr. Joseph how you would want me to 7 rule on this and what would be its consequence. 8 MR. JOSEPH: Your Honor, we would want to rule the way 9 the FAA described a significance. 10 THE COURT: Louder. 11 MR. JOSEPH: In Exhibit 12 of our declaration we 12 actually have the associate administrator for the FAA and civil 13 aviation describe the importance of a security directive. This 14 is Exhibit number 2. 15 THE COURT: Give me a moment. 16 MR. JOSEPH: Sure, your Honor. 17 If your Honor who look at the beginning of the third 18 paragraph. 19 THE COURT: This is the letter of March 13, 1996. 20 MR. JOSEPH: Correct. By the associate administrator 21 for civil aviation security. In the third paragraph he 22 describes what the significance of a security directive is and 23 it says security counter measures issued by the FAA in a 24 security directive established security minimums for adoption 25 by airlines and airports. Airlines and airports may exceed SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 25 76EAASEPA1 Argument 1 these minimum standards by implementing more stringent security 2 requirements. That would be the instruction we would say, your 3 Honor, with respect to all of these standards because he has 4 pointed to -- 5 THE COURT: Let me help you out on this. What would 6 be the way I would articulate a standard to the jury under your 7 view given these two sentences. 8 MR. JOSEPH: Your Honor, I would use what Lockerbie 9 says because Lockerbie was the law that presumably Congress had 10 in mind when they were looking at what's inconsistent. These 11 minimum standards what -- 12 THE COURT: You would want me to tell the jury that 13 what is stated in security directive 9701 was a minimum 14 standard and whether or not some higher standard was to be used 15 in relationship to these nine people was an exercise of what 16 reason, judgment, stated standards. 17 MR. JOSEPH: And federal to use the highest degree of 18 safety possible in the circumstances. But I also point out, 19 look at the text that he is calling your attention to. It just 20 allows in the first bullet point, it requires in the second 21 bullet point. It doesn't purport to be exclusive or exclusive, 22 but it doesn't say you can do no more. 23 THE COURT: Let me draw you out on here because I 24 think we have a serious tension between two facets of a 25 program. The concept of profiling is a very serious one. As SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 26 76EAASEPA1 Argument 1 of the early morning of September 11, 2001 there was concern 2 that profiling should not be exercised on ethnic lines among 3 other aspects of forbidden categories and so if it was an 4 ethnic base for suspicion the airlines could look at this court 5 directive and say if we do more because these people appear 6 ethnically suspicious, we're violating rights of citizens under 7 American law and right of people and we should not do it and we 8 should only do that which we're required to do. I think that 9 would be your point, Mr. Podesta. 10 MR. PODESTA: Yes, it would. 11 THE COURT: And then we're told, hey, this is only 12 minimum. You are supposed to do more. The airlines are at 13 sea. What more should they do? 14 MR. JOSEPH: Your Honor, first of all, you understand 15 that several of these individuals were CAPPS selectees. 16 Secondly, a ticket agent -- 17 THE COURT: What is CAPPS selectee. 18 MR. JOSEPH: Somebody who was identified under the 19 CAPPS computer profile. 20 THE COURT: Mr. Podesta, it says nine out of ten. 21 MR. JOSEPH: So they weren't pulled out. Nothing 22 procures them from doing further computer -- based on the 23 circumstances and when you look at the cog and the ACSSP. 24 THE COURT: What the cog? 25 MR. JOSEPH: Check point operations guide which is SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 27 76EAASEPA1 Argument 1 Exhibit 10 of our compilation. 2 THE COURT: Take me through that when I give you the 3 chance and what was the other? 4 MR. JOSEPH: ACSSP air carrier standard security 5 program. Both of them say -- 6 THE COURT: You'll get back to me. 7 MR. JOSEPH: Yes, sir. 8 THE COURT: But now you've gotten a better heads up 9 about what Mr. Joseph is going to say. 10 MR. PODESTA: First of all, with respect to 11 Mr. Josephs example it has nothing to do with CAPPS. It's a 12 letter about photo identification. In fact, if you look we 13 submitted an FAA memo that was produced in FAA document 14 discovery dated -- it says and it's dated February 14, 2000 and 15 it says that by January one, 2000 -- 16 THE COURT: What exhibit? 17 MR. PODESTA: Exhibit K. By January 1, 2000 all major 18 airlines had voluntarily implemented CAPPS in advance of the 19 rules mandating it as the only acceptable form of prescreening 20 for scheduled operations. 21 THE COURT: Where is this? 22 MR. PODESTA: In the replay declaration. 23 THE COURT: No. Where in the exhibit? I want to read 24 it with you. 25 MR. PODESTA: I am reading it from my brief actually. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 28 76EAASEPA1 Argument 1 MR. JOSEPH: TSA 0526, your Honor. 2 THE COURT: What paragraph? 3 MR. JOSEPH: The fourth bullet. 4 THE COURT: Got it. 5 MR. PODESTA: Now that language certainly doesn't seem 6 to me the only acceptable form of passenger prescreening seems 7 pretty mandatory and not minimum. 8 THE COURT: Now, do you accept or reject the 9 proposition that an airline could do more if it wished to do 10 more without violating the law? 11 MR. PODESTA: The answer to that is complicated. So 12 give me a minute to answer it. There are certain limited areas 13 where an airline could voluntarily do more tests coming into 14 compliance with the FAA regulations before their due date 15 giving additional screener training. You would say that has 16 nothing to do with the issue of pre-emption. The minimum 17 standard -- 18 THE COURT: Let me put a hypothetical to you. I come 19 in to an airport screener at LaGuardia. It's a busy day. I am 20 above the CAPPS profile. I have no checked baggage. My bag 21 goes through the flourescent device the magnetometer. I go 22 through the magnetometer. I'm pulled aside even though nothing 23 is registered for more scrutiny. If I refused I say I bought a 24 ticket I am entitled to go on this airplane. You can't do 25 anything more to me and the airline insists they will do more. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 29 76EAASEPA1 Argument 1 Is the airline subject to liability for preventing that person? 2 MR. PODESTA: You didn't alarm the magnetometer. 3 THE COURT: I did not. 4 MR. PODESTA: I believe that the airline if it pulled 5 you aside after you didn't alarm the magnetometer and you did 6 not exhibit any suspicious signs you were not belligerent, you 7 were not -- 8 THE COURT: I was very nice. 9 MR. PODESTA: You conducted yourself like Judge 10 Hellerstein. 11 THE COURT: The best I could but I went to special 12 acting school and I was able to get through. 13 MR. PODESTA: That would be inconsistent with the 14 requirements of the federal regulation. 15 THE COURT: Therefore the airline could be liable for 16 refusing a passenger on the plane. 17 MR. PODESTA: I can give you citations to that as well 18 appendix three to the ACSSP which is Exhibit A to Mr. -- -- if 19 you look at Exhibit A to the original declaration of Mr. Barry. 20 THE COURT: I have it. 21 MR. PODESTA: You will see and turn to Appendix three 22 which is AALTSA 7592 and you'll see this is, this first page is 23 the screening guidelines for persons and hand carry on items, 24 the screening guidelines and you'll see in the introduction 25 that this basically says this is what the FAA prescribes and it SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 30 76EAASEPA1 Argument 1 says these guidelines are consistent with current legal 2 guidelines, consistent with current legal guidelines not 3 dissimilar from the language of the statue and are designed to 4 effect uniform application optimum safety and the courteous and 5 efficient treatment of all persons subject to preboard 6 screening. 7 Then if you look down in Roman two on that page it 8 says guideline or screening persons. And it says initial 9 process something conducted by air carrier representative 10 employee or agent screening company using either a walk through 11 metal detector or a hand held metal detector and then it says 12 if the person being screened does not alarm the detector the 13 person is cleared to proceed beyond the screening point. There 14 is no -- unless there is some special circumstance, but if you 15 were just behaving in the courteous way you ordinarily do there 16 would be no legal basis for the airline or the screener company 17 to subject you to additional scrutiny and that's right in the 18 regulations. 19 And the plaintiffs with the benefit of hindsight want 20 to come in and say, well, we believe that New York law or 21 Virginia law or Pennsylvania law required that even if you 22 didn't alarm the magnetometer and were to the otherwise 23 suspicious you could be subjected to additional hand held or 24 pat-down searches. The regulations don't provide for that. 25 Now, in a special threat situation like if there was a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 31 76EAASEPA1 Argument 1 threat of a bomb for a particular flight the FAA could alter 2 these regulations and say we are going to randomly inspect 3 people but those weren't regulations we were operating on 9/11. 4 I think that that's a very clear example of where the 5 plaintiffs appear to be suggesting something that we were not 6 permitted to do. And they also seem to suggest that we should 7 have conducted more physical searches of carry on bags instead 8 of relying principally on x-rays. 9 But here again in this same exhibit if you turn to 10 page 28 of the ACSSP and I'll give you the -- it sets forth 11 the, it's TSA 7439 and it sets forth the requirements for 12 screening carry on items and it's raised in -- all carry on 13 items passing through the screening check point shall, 14 mandatory language -- 15 THE COURT: Where? I have it. 16 MR. PODESTA: Shall be screened using FAA approved 17 inspection methods. And it basically goes, first it says when 18 an image is displayed on an x-ray monitor and it looks -- then 19 it must be subjected to additional screening. And it provides 20 for two possibilities. 21 THE COURT: So there has to be a display. It has to 22 be displayed how? Physically or through a -- 23 MR. PODESTA: The primary. Let me take you through 24 this. The primary method of inspection is x-ray. X-ray 25 operator sees a possible threat item on the x-ray and he then SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 32 76EAASEPA1 Argument 1 is supposed to direct the bag, the carry on bag to be sent for 2 additional scrutiny. Now, what scrutiny it receives depends on 3 what the threat item is perceived to be. If its perceived to 4 be an explosive then you look at item A under two, which says 5 exam the carry on item using an EDT device. 6 THE COURT: What is that? 7 MR. PODESTA: Explosive trace detector. 8 On the other hand if it's a gun or a knife you go to B 9 and you conduct a physical inspection of the item which would 10 be a hand search but that's only if the x-ray operator 11 perceives a threat item when he looks through the screen. 12 Now, there is another requirement and that's continual 13 inspections. And if you go down to item three it says, the 14 following measure shall be conducted at all category X airports 15 which included Logan and Newark and Dulles and it says 16 inspections of carry on items shall be -- and where the first 17 reference was A and unfortunately the TSA has deleted certain 18 language but what the random search was if ETD devices were 19 available they were supposed to be used to inspect carry on 20 items that cannot be cleared by the x-ray operator then when a 21 number of carry on items is not -- in other words the x-ray 22 operator isn't saying any -- then there is supposed to be 23 random inspection under item one. Other items must be 24 random -- 25 THE COURT: I don't think I understand. The number of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 33 76EAASEPA1 Argument 1 carry on items selected by the x-ray operator for image 2 resolution not enough to insure continual ETD devices for 3 inspection. I don't think I know what that means. 4 MR. PODESTA: Let me you try to explain it to you. 5 The x-ray operator is looking through the bags and it happens 6 to be that a whole bunch of nuns are boarding the plane and 7 there is nothing at all suspicious, so the operator isn't 8 selecting any items for the other screener to use the ETD 9 device on or to do hand searches to look for a gun or a knife. 10 In that event they just don't want them doing nothing. They 11 want the screeners to randomly select for explosive trace 12 detection inspection more carry on items so that randomly 13 people coming through it see that on a random basis not every 14 bag by any means but a certain percentage of bags are being 15 subject to ETD and this shows, look -- 16 THE COURT: The idea being deterrence of other people 17 in the airport. 18 MR. PODESTA: Yes. It shows the preferred method was 19 x-ray and ETD and you only got into hand searches where you 20 didn't have ETD which was not the case at the 9/11 airports or 21 where you had a trace item. 22 THE COURT: The point that you are teaching me, 23 Mr. Podesta, is that these regulations were the sum and 24 substance of what check point operators had to do and there is 25 no room in your argument for additional high ended standards. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 34 76EAASEPA1 Argument 1 MR. PODESTA: Right. That is correct. 2 THE COURT: That if the airline was more diligent it 3 exposed itself to liability. 4 MR. PODESTA: It was just, these are the legal 5 requirements is my argument. Even if we could do more our 6 failure to do more didn't expose us to legal liability. 7 THE COURT: I want to put this question. The -- law 8 when standards are set out in regulation whether compliance is 9 evidence of reasonable conduct or conclusive evidence of 10 reasonable conduct. The first argument would say that the 11 airlines could argue that I am not negligent because I did 12 everything the lawyer told me to do, and other side will say 13 but you could have done more and should have done more given 14 whatever was going on at the time. You are saying that there 15 is no room for that second argument and if there Mr. Joseph 16 were to make that argument you would stand up and object and I 17 should sustain your objection. 18 MR. PODESTA: I would hope you've taken care of it on 19 a pretrial ruling but, yes, I would hope you would sustain my 20 objection. The reason for that is that's what the statute is 21 saying when it says inconsistent with or pre-empted by. 22 THE COURT: Mr. Joseph would say that it's certainly 23 not pre-empted. There is no intent and is -- there is nothing 24 inconsistent in this book of regulations with doing something 25 extra if the circumstances made it reasonable for do something SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 35 76EAASEPA1 Argument 1 extra. You are arguing that as a matter of law. 2 MR. PODESTA: I make two arguments on that. First, 3 almost every standard of care is in some sense of minimum 4 standard of care. You can always do more than the law legally 5 requires. 6 If the tests were that you can do voluntarily 7 something more than the reasonable care or the FAA regulations 8 there would never be pre-emption indeed state law would just 9 feed on itself. As reasonable care you exceed in reasonable 10 care you set a new standard. There numerous case that define 11 pre-emption that under the Federal Aviation Act, the 58 Act 12 that Mary will get into and under the Price Anderson Amendments 13 Act and many other statutes where the defendant could 14 voluntarily have done something more. But he satisfied his 15 legal obligation by meeting the federal regulations and the 16 states were not entitled to require the defendant to do more 17 than the federal regulations required on pain of liability. 18 THE COURT: Mr. Joseph would argue that if you can do 19 more it then becomes a question of reasonableness. Should you 20 do more? 21 MR. PODESTA: That's because Mr. Joseph reads the 22 statutes it depends with the language where the crash occurred. 23 THE COURT: I am trying to bring out another point, 24 Mr. Podesta. The consequence of your argument may be that it's 25 wrong to do more, that it would be a violation of federal SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 36 76EAASEPA1 Argument 1 regulations to do more, that if a passenger were to be stopped 2 doing more that passenger could sue you for denying his 3 entrance to a public transportation vehicle and I am wondering 4 if I am drawing your argument too much. 5 MR. PODESTA: No. You are drawing the argument quite 6 correctly. It is too facile to say -- 7 THE COURT: You are not arguing the minimum. You are 8 saying exclusive. 9 MR. PODESTA: Yes. 10 THE COURT: You can't do more. You shouldn't do more. 11 You shouldn't do more. 12 MR. PODESTA: In most instances we shouldn't do 13 anything more or different and it's -- 14 THE COURT: When should you do more? 15 MR. PODESTA: Well, that gets me -- all right. There 16 is an element of common sense required under the regulations. 17 That is not a -- 18 THE COURT: Mr. Joseph would rise up -- 19 MR. PODESTA: He might rise. 20 THE COURT: I'll rise for him. 21 MR. PODESTA: The federal regulations set forth the 22 exclusive standard to the extent they use words like "common 23 sense" like in judging whether a particular knife is menacing. 24 There might conceivably be a question of fact under the federal 25 standards whether the particular screener or airline -- SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 37 76EAASEPA1 Argument 1 THE COURT: What do I care? The jury doesn't care, 2 federal or state what the jury cares about and what I care 3 about I am trying to think what I am supposed to do with the 4 trial that is my test. So I am right to think if Mr. Joseph 5 starts arguing reasonableness, you aren't reasonable, you 6 aren't paying attention then I can't sustain our your objection 7 whether it's federal source or state it makes no difference if 8 it's federal -- of state makes no difference. 9 MR. PODESTA: Federal standard of common sense that 10 has to be decided in the context of the federal regulations 11 which say that four inch knives are generally permitted, Swiss 12 army knives are generally permitted. 13 THE COURT: You use words like "generally". 14 MR. PODESTA: That is the federal standard. The cog 15 says Swiss army knives are permitted, but the common -- 16 THE COURT: What it generally means, what common sense 17 exceptions mean is that the airlines could argue that I was 18 absolutely reasonable, perfectly reasonable in doing what the 19 federal law required me to do and not doing more and it would 20 be permissible for Mr. Joseph to argue that in the 21 circumstances presented on the morning of September 11, 2001, 22 you should have done more and you would say what is the basis 23 of that. And the basis of that is common sense. So you would 24 say as matter of argument that I did what I had to do and you 25 should have done more and the jury would decide. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 38 76EAASEPA1 Argument 1 MR. PODESTA: That is true, but that would be decided 2 under the federal regulations. 3 THE COURT: What is the difference? The jury doesn't 4 care about -- 5 MR. PODESTA: Because if you just have a naked state 6 law rule you don't have the basic starting point that knives 7 under four inches are permitted unless they are menacing and 8 the common sense comes into place in making a judgment as to 9 whether a particular knife is menacing. The plaintiffs cont 10 argue we should have banned all the -- 11 THE COURT: I would think I agree with you. In other 12 words, where there is a specific statement on an absolute -- in 13 the regulation you should follow that. But where there is any 14 kind of exception for common sense or where words like 15 "generally" are used that suggest looking at circumstance that 16 your conduct could be challenged on standards of reasonableness 17 in the circumstance. 18 The jury doesn't hear whether it's a federal 19 incorporation of the state standard to talk about common sense 20 or not. What the jury is told is that the regulations say four 21 inches and generally or common sense exception and then the 22 question is is there grounds for an exception. 23 MR. PODESTA: There could be a question of fact. I 24 think I agree with the way you phrase it as long as they're 25 told this is what the federal regulation says we're obliged to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 39 76EAASEPA1 Argument 1 follow the federal regulations. You have to decide, ladies and 2 gentlemen, whether in carrying out that regulation we exercise 3 the -- 4 THE COURT: I am going to want to talk with you more 5 about this after I hear Mr. Joseph. I think what we're coming 6 down to is something that I quite understand. It's going to be 7 a difficult instruction to give because I have to incorporate 8 all the specific regulations and deal with the common sense 9 exceptions but it can be done and I think that's what I am 10 learning from you, Mr. Podesta. 11 MR. PODESTA: You want me to sit down or may I 12 continue? 13 THE COURT: Well, it's tempted to say yes. 14 MR. PODESTA: I can voluntarily do more. 15 THE COURT: I really enjoyed listening to you. 16 MR. PODESTA: Can I just make one more point then I 17 will sit down complying with your Honor's regulation. To get 18 back to your point about it's a very differ judgment to 19 determine whether voluntarily exceeding is consistent with the 20 regulations. For example, we could do more, could have done 21 more than 9/11 by for example singling out all young Arab males 22 or pat-down searches. That would have been more but it would 23 have been inconsistent with the policy and the regulation. 24 Would it have been doing more to arm our pilots on 25 9/11 and just disregard the common strategy? Some might argue SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 40 76EAASEPA1 Argument 1 was doing more, but it would be inconsistent the regulations. 2 The regulations are based on a series of policy judgments that 3 were designed, what is the threat, what is the best measure to 4 meet the threat? How do I adopt these security measures while 5 still maintaining an efficient air transportation system 6 while still meeting our civil rights obligations to the 7 passengers and that's why the FAA regulations control. 8 They're the ones who were making the judgment as to 9 how to best take into account those various considerations. A 10 jury 9/11 just given a post reasonable care standard is surely 11 going to focus on security and ignore the other policy 12 consideration the FAA had to take into account. 13 THE COURT: One of challenges of this trial would be 14 to put the jury in a frame of mine before the events of 9/11 15 clearly and I fully anticipate the very interesting rhetoric 16 that you've just expressed will be heard again in the mouth of 17 an expert. 18 MR. PODESTA: Yes. But I would note that rhetoric 19 would be a lot more speculative if we get some of discovery 20 from the government that Mr. Wayland is going to be asking you 21 for and I will try not to jump up, your Honor. 22 THE COURT: All right. 23 24 MR. ELLIS: Your Honor, I know you wanted limited 25 argument from one attorney given until last evening that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 41 76EAASEPA1 Argument 1 Mr. Podesta would be the only presenter from our side. He 2 focused on inconsistent with. I think adds your Honor started 3 to say beginning of his presentation you were interested in 4 pre-empted buy as well and if I would intrude on you too much 5 if you gave me just a couple of minutes I could briefly address 6 it. 7 THE COURT: Go ahead, Mr. Ellis. 8 MR. ELLIS: Thank you, your Honor. 9 THE COURT: Then I think we will break. 10 MR. ELLIS: Thank you, your Honor. 11 Just briefly, Jeffery Ellis on behalf of United. 12 The language of the statute not only has the words 13 inconsistent with but also has the worlds pre-emptive buy. And 14 as our supplemental briefing set forth there are three statutes 15 that are at issue that, quite frankly, you need to look at in 16 order to determine what is their pre-empted scheme and what the 17 scope of any pre-empted that might be focused by that scheme. 18 Those statutes are the 1958 Federal Aviation Act, the 19 cases we have cited to unequivocally establish that it was 20 Congress's intent as long back as 1926 to establish a 21 uniformity of regulation. It is that statute in 1958 that 22 contained in its safety regulatory provisions, a minimum 23 standards provision, as well as a savings of remedy provision 24 for remedies existing at that time. 25 I might add, your Honor, that actually that provision SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 42 76EAASEPA1 Argument 1 goes back to I believe it was 1926 and at that time including 2 in 1958 any intervening criminal act would not allow any 3 recovery for anyone. 4 So the remedies that were saved are saved in that 5 statute. What is important I think most important in this 6 litigation is the Aviation Security Improvement act which was 7 passed in 1990 in response to Lockerbie. The Lockerbie 8 decision did not have the Aviation Security Improvement Act to 9 consider because it wasn't in effect. 10 The president established a commission to evaluate 11 aviation security in the aftermath of Lockerbie and to come up 12 with a solution to try and combat what was starting to be a 13 growing problem international terrorism. The solution that 14 Congress came up with in words of the statute are quite clear. 15 They didn't want to have any screw-ups here. They wanted to 16 try and set up a system to do the best they could and that 17 system required in accordance with 29 U.S.C. 44904 it 18 specifically required the director of the Federal Bureau of 19 Investigation, the Administrator of the FAA to consult, to 20 decide what are the most effective counter measures to address 21 any deficiencies that they found to exist with respect to the 22 security significance system. 23 Those words most effective correct any deficiency 24 clearly mean what they say. The system that they mandated to 25 be implemented was supposed to be the most effective and to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 43 76EAASEPA1 Argument 1 have corrected any deficiencies. The plaintiffs arguments is 2 in essence, that system was not the most effective. It wasn't 3 even reasonably effective and there were deficiencies. That 4 flies in the face of the congressional language that Congress 5 used in the Aviation Security Improvement Act and Section 44903 6 of that section specifically states that that system is 7 supposed to be uniform for every air carrier -- 8 THE COURT: I want to follow your argument. You are 9 referencing sections 316 A of the public law -- 10 MR. ELLIS: Your Honor, I wish I could tell you, but I 11 think that was it, yes. 12 THE COURT: It reads as follows: The administrator of 13 Federal Aviation Administration shall prescribe such reasonable 14 rule and regulations; is that the one? Is that the section? 15 MR. ELLIS: I'm reading from the codification, your 16 Honor, but go ahead. 17 THE COURT: Shall prescribe such reasonable -- I tell 18 you what, let me ask you to look at the book. 19 (Pause) 20 MR. ELLIS: I think you are looking at the wrong 21 section, your Honor. 22 THE COURT: I could follow you. I have it here. What 23 is the section again? 24 MR. ELLIS: Your Honor, if you could look at 44904. 25 Domestic air transportation security system. Your Honor, if SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 44 76EAASEPA1 Argument 1 this is a good time for a break we can get the stuff and make 2 it easier. 3 THE COURT: I don't want you to feel pressed. Let's 4 take ten. 5 (Recess) 6 THE COURT: Okay. 7 MR. ELLIS: Thank you, your Honor. 8 I have a copy of the U.S.C., your Honor. And there 9 were two sections I was going to refer you to. The first is 10 44904 and that section has three subparts. The statute itself 11 is entitled Domestic Air Transportation security system. 12 Section A is entitled Assessing Threats and it states: The 13 administrator of the FAA and the director of the FBI jointly 14 shall assess current and potential threats to the domestic air 15 transportation security system. The assessment shall include 16 consideration of the extent to which there are individuals with 17 the capability and intent to carry out terrorist or related 18 unlawful acts against that system and the ways in which those 19 individuals might carry out those acts. The administrator and 20 the director jointly shall decide on and carry out the most 21 effective method for continuous analysis and monitoring of 22 security threats to that system. 23 Section B again ascribes to the director and the 24 administrator director of the FBI and the administrator of the 25 FAA the challenge of assessing security that is in place in SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 45 76EAASEPA1 Argument 1 response to those threats. 2 And Section C, improving security, states: The 3 administrator shall take necessary actions to improve domestic 4 air transportation security by correcting any deficiencies in 5 that security discovered in the assessment analyses and 6 monitoring carried out under this section. 7 And in conjunction with that, your Honor, Section 8 4944903 Subsection B (3) says: The administrator shall 9 prescribe regulations to protect passengers and property on an 10 aircraft operating in air transportation or intrastate air 11 transportation against acts of criminal violence or aircraft 12 piracy. When prescribing a regulation under this subsection 13 the administrator shall and it goes on to state -- 14 THE COURT: To the maximum extent practical to require 15 a uniform procedure for searching and detaining passengers and 16 property to ensure their safety and other criteria. 17 MR. ELLIS: It also says courteous and efficient 18 treatment by an air carrier. 19 Your Honor, I can tell you that from the pre-emptive 20 aspect of the issues that are before you -- 21 THE COURT: What you are telling me, Mr. Ellis, 22 implementing what Mr. Podesta was telling me is that there is a 23 federal regulatory mechanism that needs to be observed. 24 Whether there is any room for additive im put in terms of words 25 like generally, minimum standard etc. that is the area where SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 46 76EAASEPA1 Argument 1 reasonableness can be exercised. And to define what is 2 reasonableness we look to what is established in the federal 3 law and to whatever extent appropriate and to the common law. 4 MR. ELLIS: I would respectfully disagree to this 5 extent, your Honor. You had asked a question of Mr. Podesta 6 with respect to whether or not the failure to do more could 7 hold airlines liable. I argue the third, before the Third 8 Circuit the Abdulla case and argue before the Fifth Circuit the 9 Witty case and that was the claim in both of those cases. In 10 Abdulla it was claimed that American Airlines pilots instead of 11 avoiding a thunder storm by 20 miles should have avoided by 40 12 or 100 miles. 13 THE COURT: Because of the dangerous nature of that 14 thunder storm. 15 MR. ELLIS: More safety. An expert appeared and said 16 that is what they should have done. The jury came back with a 17 verdict and we moved to set the verdict aside. The district 18 court judge agreed with us. He said that federal law 19 pre-empted, you can't argue for more and the Third Circuit 20 agreed. 21 In the Witty case which the Fifth Circuit took a 22 couple of years ago after they had the Hodges case and they 23 clarified what they meant in the Hodges case. But in the Witty 24 case the argument was I got deep vein thrombosis on your 25 flight. I got it because I was sitting in a cramped seat. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 47 76EAASEPA1 Argument 1 What you should have done is two things. You should have given 2 me more of a warning telling me I could get deep vein 3 thrombosis on an airline flight and you should have given me 4 more leg room. 5 And what the Fifth Circuit said, number one, airline 6 warnings are controlled by federal law. And airline warnings 7 are prescribed by federal law not to require this additional 8 information. You can't use that as a basis for liability. 9 The second thing that they said was the Airline 10 Deregulation Act of 1978 precluded a claim requiring you to 11 have more leg room because the net result of that would be 12 increased fares and you can't use state law to try and achieve 13 that result. 14 THE COURT: I think you'd like me to take note of 15 several holdings in the Witty case. We hold that federal 16 regulatory requirements for passenger safety warnings and 17 instructions are exclusive and pre-empt all state standards and 18 requirement. 19 MR. ELLIS: Yes, your Honor. 20 THE COURT: That's at page 385. Allowing courts and 21 juries to decide under state law that warnings should be given 22 in addition to those required by the Federal Aviation 23 Administration would necessarily conflict with the federal 24 regulations. 25 Here is another statement. We do not, for example, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 48 76EAASEPA1 Argument 1 express an opinion as to whether emergency or unplanned 2 situations on flights can form the basis of a state failure to 3 warn claim that is not pre-emptive. 4 MR. ELLIS: Yes, your Honor. Witty does -- I am 5 sorry, your Honor. 6 THE COURT: I was just thinking to myself that there 7 is room in these decisions for exercise of reasonable conduct. 8 But the field is very largely occupied by its precise federal 9 requirements. 10 MR. ELLIS: Your Honor, I would say this, and I'm 11 going to cut my presentation off because you have been very 12 kind to let me say a few words but I will say this, the Abdulla 13 case, the Witty case which I know Ms. Gaston will get into, of 14 course, will say that the entire field is occupied and they'll 15 get into that aspect of it. But at the end of the day 16 plaintiff's claim boils down to them saying that what the FAA 17 was mandated to do by statute, namely, correct any deficiencies 18 in the current system they didn't do and that we can be held 19 liable for that. Not only do we say federal law pre-empts that 20 argument, but I would also say this, your Honor, they do not 21 dispute the fact -- 22 THE COURT: I would like to hear that after I hear 23 from Mr. Joseph. 24 MR. ELLIS: And I will just end with one thing, to the 25 extent they claim that state law actually imposes higher SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 49 76EAASEPA1 Argument 1 security requirements there is absolutely nothing -- 2 THE COURT: Save that too. 3 MR. ELLIS: Okay. Thank you very much. 4 THE COURT: Ms. Gaston. 5 MS. GASTON: May it please the Court, your Honor, Mary 6 Gaston, on behalf of the Boeing company. 7 As your Honor is aware, Boeing moved independently for 8 a determination of the applicable law. Boeing did that, your 9 Honor, for a very simple reason. All of the claims against 10 Boeing. 11 THE COURT: Speak a little louder, please. 12 MS. GASTON: Yes, your Honor. 13 All of claims against Boeing are predicated on the 14 factual allegation that the planes that were hijacked on 9/11 15 were defectively designed. Because the issue of whether 16 Congress has pre-empted the area of aircraft design depends on 17 an analysis of Federal Aviation Act of 1958 and its predecessor 18 statute. That is the reason Boeing moved independently, your 19 Honor. It required this Court to construct whether Congress 20 intended to pre-empt the field of aircraft design from state 21 regulation. 22 And I'd like to start there, your Honor, because of 23 something that you just mentioned. You indicated that you felt 24 that there was room in state law to both impose the federal 25 regulations which you recognize are extensive as well as impose SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 50 76EAASEPA1 Argument 1 state tort law. 2 THE COURT: No, I don't think so. If I said that I 3 don't think that was an accurate reflection of what probably is 4 the case. What I thought to say was that where there are 5 issues of reasonableness probably they are federally sourced, 6 but that since there is so little definition in federal law of 7 standards and care, undoubtedly, the federal law would 8 incorporate much of what the common law has developed. 9 I keep thinking, Ms. Gaston, how I am going to apply 10 the information today. Presumably, it's in jury instructions. 11 Presumably it will be in terms of objections. It may also be 12 in the kinds of evidence that will be presented, for example, 13 expert evidence. None of which is before me. So, largely, 14 this can be informational. I don't know. But there is no 15 motion to dismiss. There is no motion for summary judgment 16 before me. But it's very important material that is been 17 presented because it does inform how we all think about these 18 cases. 19 MS. GASTON: That clarification, your Honor, is very 20 helpful. It is very helpful in a couple of contexts, 21 specifically, with regard to the Court's discussion of minimum 22 standards. Turning to Section 408 B 2, your Honor, of the 23 Stabilization Act which simply has the language in it that 24 state law will be applied only if it is inconsistent or 25 pre-empted. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 51 76EAASEPA1 Argument 1 Mr. Podesta covered at length the inconsistent 2 provision. And I am going to occupy the field, your Honor, 3 because I am going to devote almost all of my discussion to the 4 issue of field pre-emption. But I would like to make one 5 comment with regard to the inconsistent as it relates to 6 Boeing. 7 You asked for examples of where there were any 8 inconsistencies and we pointed out in our brief, your Honor, 9 that as I mentioned earlier they are suing Boeing alleging that 10 the door, the cockpit door was allegedly defective because it 11 didn't prevent this hijacking. 12 On a totally collateral note, we've moved for summary 13 judgment on the issue of causation that there is no linkage 14 between the door and the hijacking. But, nonetheless, before 15 the Court is the briefings on the standard of care which is why 16 Boeing obviously submitted its Boeing motion. 17 With regard to that claim that the doors were 18 defective and should have prevented a hijacking, we pointed out 19 to the Court that this was an issue that the FAA specifically 20 looked at back in the early 70s. The FAA explicitly published 21 a notice of rule making, identifying that the issue of 22 hijackers getting into the cockpit and harming the crew and 23 taking over the plane was a matter of concerning to the FAA. 24 And at FAA, therefore, put out a variety of rules suggesting 25 ways that the cockpit could be made more intrusion resistant. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 52 76EAASEPA1 Argument 1 And over the course of several years it considered those 2 options. And ultimately, your Honor, the FAA rejected any 3 additional cockpit intrusion resistant measures for safety 4 reasons. 5 We have provided that the federal registry sites in 6 our brief, your Honor. The point of that is only that it would 7 be inconsistent for obvious reason to hold Boeing liable under 8 state tort law for an issue that the FAA, explicitly, as the 9 determiner of aviation aircraft design safety determined was 10 not appropriate. 11 THE COURT: I'd like you to take me through the 12 applicable regulations. 13 MS. GASTON: I will, your Honor, if you could just 14 give me one second. 15 (Pause) 16 MS. GASTON: The FAA notice of proposed rule making 17 was first published in the federal register at volume 35 number 18 145 on Tuesday July 28, 1970 and it was docket number 1046D 19 Notice of Proposed Rule Making 70-20. The name of the proposed 20 rule was Pilot Compartment Security Large Passenger Carrier 21 Airplanes. And in there, your Honor -- I don't know that I 22 have the page in the federal register -- but on a second column 23 in the proposed rule making it specifically identifies that 24 despite concerted efforts being made by the FAA and air 25 carriers incidents continue to occur within the safety of the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 53 76EAASEPA1 Argument 1 flight of aircraft engaged in passenger carrying operations 2 under part 121 of the -- has before jeopardized by persons 3 intending to harm the crew or take command of the aircraft. 4 In the context for this is, obviously, your Honor, the 5 rash of hijackings that were occurring in the 1960s. The 6 notice of proposed rule making goes on to discuss a variety of 7 ways that they could increase the security of, for example, the 8 cockpit door by improving the hinges, by improving the locking 9 mechanism. It did discuss a way to permit the crew to view 10 through the doors and a variety of other measures. 11 Approximately two years later there were additional 12 security measures proposed by the FAA in conjunction with that 13 same rule and it dealt with bulletproofing the cockpit, 14 additional means that could be taken to protect the pilot in 15 the event of a hijacking. 16 That occurred on Friday March 17, 1972 and was 17 published in the Federal Register, volume 37, number 53. 18 Ultimately, your Honor, after receiving public 19 comments, I believe they received approximately 20 different 20 public comments, On Thursday September 27, 1973 Federal 21 Registered, volume 38, number 187, the FAA published notice 22 that it was withdrawing its proposed rule making notice 72-7 23 which was the subsequent number. You have to kind of walk it 24 through to follow the numbering. 25 And the FAA explained why it was that it did so. It SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 54 76EAASEPA1 Argument 1 explained that in light of the, what it referred to here as the 2 comment strategy, the FAA approved way of dealing with 3 hijackers. It referred to the fact that it was unlikely that 4 simply strengthening the door would actually result in 5 hijackers not entering the compartment because the pilot would 6 let them in any way with a threat to a passenger or crew 7 member. It did you say the fact that there was the fear that 8 pilots negotiating behind a secured door might actually trigger 9 more violence. The FAA actually discussed the fact that it 10 also may increase the use of explosives to get into the 11 cockpit. But the bottom line, your Honor, is these types of -- 12 THE COURT: What you are saying is that there was a 13 deliberate decision on the part of the agency regulating air 14 craft manufacturer not to have intrusion proof doors. 15 MS. GASTON: That is correct, your Honor. And the FAA 16 has made clear -- 17 THE COURT: That's preclusive. What you are saying is 18 that since the FAA made a conscious deliberate decision after 19 proposed rule making not to do it. Then the states don't have 20 the power, common law or statute to mandate doing it. 21 MS. GASTON: I agree, your Honor. 22 THE COURT: That's your argument. 23 MS. GASTON: I agree, your Honor, for two different 24 reasons. First because of conflict pre-emption because it 25 would be inconsistent for the states to require something which SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 55 76EAASEPA1 Argument 1 the FAA has decided not to do. So under classic conflict 2 pre-emption and in fact under the -- decision of 2000 that 3 conclusion is mandated. You cannot force, the states can't 4 force the manufacturers -- 5 THE COURT: That is what I was trying to say. 6 MS. GASTON: But the second issue is equally important 7 and that is you cannot do it because the issue -- because 8 Congress has decided that the field is occupied and that is 9 important, your Honor, and that is what I'd like to focus my 10 attention on. I'd actually like to discuss -- 11 THE COURT: I don't think you need to say much about 12 that. This is aircraft design state to state. It's not a 13 matter of having state interest. State can supersede the 14 federal interests. It is clearly an argument for commonality 15 here. 16 MS. GASTON: I would agree. 17 THE COURT: I think you can reserve on that point. If 18 it's raised you can come back but I think that point is clear. 19 MS. GASTON: Okay. In that case, your Honor, the 20 reason I had and intended to focus the discussion on field 21 pre-emption is because it seems from the judge's comments that 22 where there were minimum standards, and there is no question 23 that that language is in the Federal Aviation Act -- 24 THE COURT: You are saying that the Federal Aviation 25 Administration deliberately decided that it did not want SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 56 76EAASEPA1 Argument 1 intrusion proof doors being manufactured on airplanes. 2 MS. GASTON: Right. 3 THE COURT: Because in its judgment it thought it was 4 counterproductive. That is a very important decision. Now, I 5 guess the way it decided it may be important and why they 6 decided it may be important. But you are telling me that this 7 was a deliberate, conscious decision weighing the pros and cons 8 of the situation and exercising judgment by the federal agency 9 and how it exercises such judgment. 10 MS. GASTON: That is correct, your Honor. But given 11 the creativity -- 12 THE COURT: Why didn't you move for summary judgment. 13 MS. GASTON: My expectation that we will after you 14 rule on our causation position. 15 THE COURT: Well, I ruled against you on causation. 16 No, on duty. But the causation argument is a different 17 argument. 18 MS. GASTON: That is correct, your Honor. 19 THE COURT: You are saying that the argument of 20 negligence is faulty because you did what the feds told you to 21 do. 22 MS. GASTON: That's correct, your Honor. 23 THE COURT: Well, it's a different argument from that 24 which was made before. The argument I ruled against you was on 25 duty. The issue of proximate cause is, I think, factor and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 57 76EAASEPA1 Argument 1 very much depends on the issue of intervening cause. But 2 that's not why we're here today. We are talking about standard 3 negligence and you are saying that you complied with standards. 4 MS. GASTON: Your Honor, yes, I am saying that we 5 complied with the standard including the standard with regard 6 to the cockpit door and we did exactly what the FAA told us to 7 do. There are also, however, this plaintiff's complaint, some 8 more amorphous allegations of numbers against Boeing where they 9 allege that the plane is defective but they don't allege with 10 any specificity how the plane is defective. 11 The concept of field pre-emption, therefore, is still 12 applicable. 13 THE COURT: Well, at this point in time I think we're 14 going to need some more definition. I want to read out the 15 portion of my decision on duty reported at 28 F.Supp 2d 279 16 having to do with Boeing. It appears at pages 307 and 308 of 17 the decision. 18 Boeing also argues that the regulations of FAA 19 relating to the design of passenger airplanes did not require 20 an impenetrable cockpit door and thus it designs which 21 satisfied FAA requirements could not be defective. However, 22 the only support provided by Boeing of its argument is after 23 the fact FAA policy statement issued to explain why the FAA in 24 2002 was requiring airplane manufacturers to provide such doors 25 even though the FAA previously had not done so. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 58 76EAASEPA1 Argument 1 And what you are doing now is going back to 1973 and 2 showing me that this had been a conscious decision much earlier 3 and controlled what was done in relationship to aircraft that 4 were flown on September 11, 2001. 5 MS. GASTON: That is correct. 6 THE COURT: Why don't we reserve everything else until 7 after we here from Joseph? 8 MS. GASTON: Will do. 9 Thank you very much, your Honor. 10 MR. WOOD: My name is Mark Wood and I am counsel for 11 Massachusetts Port Authority, although, this morning I am also 12 speaking on behalf of Dulles International Airport and Newark 13 International Airport. 14 Your Honor, I will try to be brief and not to repeat 15 what has been gone over by my colleagues. 16 THE COURT: I won't let you. 17 MR. WOOD: I am sure of that. I have previous 18 experience. 19 After the airport operators, of course, there is about 20 airport security, this case. And we seek a ruling that federal 21 law assigns the airport security responsibilities. In other 22 words, you have to look at federal law to find out at an 23 airport, JFK or Logan or any other of these airports in the 24 country, you have to look at federal law to find out what the 25 security responsibilities are and one of the reasons -- SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 59 76EAASEPA1 Argument 1 THE COURT: Doesn't Mr. Ellis's argument on 2 pre-emption and Mr. Podesta's argument on an inconsistent with 3 and the specific statutes given to me by Mr. Ellis really say 4 what you want to say? 5 MR. WOOD: Well, it does, your Honor. If you would 6 also note that at pages ten to 14 of our opening brief we have 7 other specific statutes and regulations that are apply 8 specifically, your Honor, to airports. 9 THE COURT: Let's go to those. Go right to the extra 10 stuff. 11 MR. WOOD: Okay. 12 THE COURT: I have your brief in front of me. 13 MR. WOOD: We start out with -- if you look at page 11 14 at 49 U.S.C. 449003B and in those sections Aviation Act 15 specifically delineates security responsibilities. 16 I think if you look at the brief rather than have me 17 treck through all of this, your Honor -- 18 THE COURT: You know, Mr. Wood, I learned in law 19 school that you go to the source. Stay you away from secondary 20 stuff. 21 MR. WOOD: And if you go to the source you find out 22 that the administrator of the FAA is directed to prescribe 23 regulations requiring preboarding screening and that's the 24 obligation of the air carrier. 25 THE COURT: Administrator shall prescribe regulations SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 60 76EAASEPA1 Argument 1 to protect passengers and property on an aircraft operating in 2 air transportation or intrastate air transportation against an 3 act of criminal violation or aircraft piracy 44903B. That's 4 what Mr. Ellis read. 5 I really want to move you into new stuff. Let's 6 assume that one of the requirements that Congress required of 7 you -- decide to consented to the President's Act is I knew how 8 to read and remember. So let's go from there. 9 MR. WOOD: The same act then talks about what the 10 airports are to do which Mr. Ellis didn't talk about and that 11 is the administrator will prescribe rules and regulations. I 12 am looking at 44903C2A to address access control by carrier at 13 an airport operates and to take measures to improved system of 14 access control. 15 And the way, your Honor, if you look further in our 16 brief that that is done is under 14 CFR Section 107. And under 17 107 there is a whole many pages of specifics federal 18 regulations on how that is to be done. You have to give badges 19 to people who use the doors. You have to keep the doors 20 looked. You have to put a fence up around your airport and a 21 number of other things. 22 This is very carefully, specifically set out as to how 23 security at an airport is to be handled and it is divided up 24 among three parties. It is divided up among the airport 25 operator, the airlines that are using the airport and the FAA. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 61 76EAASEPA1 Argument 1 And the FAA, your Honor, in 49 U.S.C. Section 44933B3 2 are directed to supervise and to approve the way these 3 responsibilities are being carried and that has to be done with 4 a written plan, your Honor, an ASP that we talk about for the 5 airports and by a written plan for the airlines. And once 6 those are approved you can't deviate from those plans at Logan 7 or Dulles or Newark without having the FAA approve the 8 deviation that you would like to implement at your airport. 9 THE COURT: Each airport has a federal security 10 manager appointed by the FAA? 11 MR. WOOD: Yes, your Honor. 12 THE COURT: And that manager is to receive 13 intelligence information related to aviation security. 14 MR. WOOD: One of his duties. 15 THE COURT: And insure and assist in the development 16 of a comprehensive security plan for the airport, establishing 17 each carrier's responsibility. 18 MR. WOOD: Yes, your Honor. 19 THE COURT: And measures to be taken during periods of 20 normal aircraft operations and during periods where the manager 21 decides that there is a need for additional airport security. 22 What else is there to look at? 23 MR. WOOD: I think the other point is that if you are 24 going to deviate from what that regional administrator has 25 approved that you can do at Newark Airport you have to get SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 62 76EAASEPA1 Argument 1 specific authorization and approval from him in order, or her, 2 in order to do that. 3 THE COURT: Where does it say that? 4 MR. WOOD: It's found, your Honor, in Part 107.3A. 5 The citation would be 14 CFR 107.3A. It's a requirement that 6 the airports adopt and carry out a security program that must 7 be approved by the director of civil aviation security by the 8 FAA. And for example, your Honor, and this applies to the 9 airlines with the manual or with the approved plan that we were 10 talking, Mr. Ellis was talking about. American airlines out 11 at -- 12 THE COURT: Let me ask this question. This fellow is 13 a federal appointee, the security manager? He is a federal 14 appointee? 15 MR. WOOD: Yes, he is. 16 THE COURT: If he is a federal appointee and he makes 17 a mistake the airport authority doesn't get blamed, does it? 18 MR. WOOD: Well, if the airport authority follows the 19 approved plan it doesn't get blamed, that's correct. 20 THE COURT: So the question then becomes, is there 21 anything in the regulations that apply to the airport authority 22 which gives judgment in and discretion to the airport 23 authority. 24 MR. WOOD: Not with respect to the delineation of 25 these responsibilities. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 63 76EAASEPA1 Argument 1 THE COURT: Well, you are saying then -- 2 MR. WOOD: If Dulles couldn't decide, we're going to 3 start screening passenger. They're not authorized or approved 4 in the ASP to do that. And without getting the FAA's approval 5 to do that they couldn't do that. It would be illegal to do 6 that. And of course the reason for this, your Honor, is that 7 if it's everybody's responsibility for security at an airport 8 then nobody's accountable and -- 9 THE COURT: So who is responsible at Dulles? 10 MR. WOOD: At Dulles it is very specifically set out 11 that the responsibility, for example, for screening passenger 12 and cargo carriers are the air carriers. It's set out by 13 Congressional statute -- 14 THE COURT: So your argument is that there is no room 15 for liability on the part of airport authority? 16 MR. WOOD: Not as to that defining responsibility. 17 THE COURT: What is the argument of liability on the 18 part of the airport authority? 19 MR. WOOD: What is the plaintiff's argument against 20 the airport authorities? Well, in the master complaint, your 21 Honor, it is so vague and amorphous. That was one of the 22 reasons we came in with a motion to dismiss. We don't know. 23 We're responsible for a safe airport. 24 THE COURT: You don't know why you are being sued? 25 MR. WOOD: That's basically what the contention is we SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 64 76EAASEPA1 Argument 1 are responsible for a safe airport. 2 THE COURT: You are saying that as long as I've 3 delegated to the right people, that is all I have to do. 4 MR. WOOD: No. What I am saying is that as long as we 5 have complied, not negligently complied with the 6 responsibilities that are assigned to us under this federal 7 scheme then we're not liable. 8 THE COURT: Do you know what, if any, aspect of 9 responsibility is complained of as actionable against you? 10 MR. WOOD: Not other than operating a safe airport 11 there has been no allegation -- Someone came through a fence or 12 a door. 13 THE COURT: Why don't you reserve until after 14 Mr. Joseph speaks. 15 MR. WOOD: If I could just make one other part -- 16 THE COURT: I think you should reserve. Since you 17 don't know, then there is no point in arguing. 18 Mr. Joseph, you are going to divide it up in, I guess, 19 the same sequence as we heard this morning. 20 MR. JOSEPH: Speaking for the plaintiffs, my argument 21 going to be direct primarily to the airlines in the security 22 companies. We did not sue the airport operators. 23 Mr. Williamson can address that. I may cover Boeing a bit 24 because the statute -- I'm going to go through a statutory 25 analysis was your Honor as I believe your Honor has indicated a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 65 76EAASEPA1 Argument 1 penchant to do and I will touch on the Boeing issue as well. 2 But I am not first in that. Mr. Williamson will do that. 3 THE COURT: Mr. Williamson, you will do Boeing and 4 airport authority. 5 MR. WILLIAMSON: Yes, your Honor. 6 MR. JOSEPH: Your Honor, let me begin with 7 inconsistent with. I am not going to go definitionally first. 8 We actually have some learning from Second Circuit as contours 9 as inconsistent with. We have some legislative history, but 10 I'll come back to that. Let's just take it in a colloquial way 11 from now. 12 If Congress said they didn't want actions to be 13 premised on notions that were inconsistent with federal law 14 what is it that Congress would have in mind? What was it that 15 the industry, that the FAA said these regulations meant? Were 16 they a pass, a free pass if they were honored to go forward or 17 were they minimum standards because of the statutory duty to 18 exercise the highest possible degree of safety in the public 19 interest? 20 And your Honor if you have our declaration handy that 21 might be useful. 22 THE COURT: Yes. 23 MR. JOSEPH: Exhibit 19 of that declaration is from 24 the FAA web site as it existed on 9/11. At the top of page 25 you'll see it's dealing with civil aviation security. So this SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 66 76EAASEPA1 Argument 1 is what the FAA thought on 9/11 with respect to civil aviation 2 security. If you look at the third question on the first page, 3 can an airline exceed FAA minimum requirements? Answer: Yes, 4 the FAA sets minimum requirements for airlines to follow. 5 Should airlines wish to exceed those requirements, the FAA 6 cannot prohibit them from doing so. 7 And if your Honor will with me turn to page four of 8 five, again, this is the printout from the FAA web site. 9 THE COURT: This responds directly to Mr. Ellis's 10 argument. 11 MR. JOSEPH: Exactly, your Honor. 12 THE COURT: Of Abdulla and Witty teach that the 13 regulations are conclusive. 14 MR. JOSEPH: Your Honor, the Abdulla case deals with a 15 specific regulation that specifically sets out a standard of 16 care. We have a small statutory compilation for your Honor 17 that might be handy, if I could hand it to you and opposing 18 counsel that I will be referring to. 19 THE COURT: Yes. 20 MR. JOSEPH: Your Honor, Abdulla standard is number 21 nine in here, the last one. It's 14 CFR 91.13, careless or 22 reckless operation. And it says, A, aircraft operations for 23 the purpose of air navigation. No person may operate an 24 aircraft in a careless or reckless manner so as to endanger the 25 life or property of another. Here the FAA has spoken and set SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 67 76EAASEPA1 Argument 1 forth a standard of care and that is a standard of care that 2 does not apply to security. 3 We have a statutory standard of care which is in the 4 first tab 44701, Subdivision D. And this is in prescribing 5 regulations which includes security regulation. It says when 6 prescribing regulation or standard under Subsection A or B -- 7 THE COURT: Slow down. 8 MR. JOSEPH: Subsection D is the last subsection on 9 the last threes line up from the bottom. When prescribing a 10 regular or standard under subsection A or B of this section or 11 any of other sections of this title, the administrator shall, 12 one, consider, A, the duty of an air carrier to provide service 13 with the highest possible degree of safety in the public 14 interest. 15 Now, this statute has a predecessor which the Second 16 Circuit has spoken on and said that this is the standard in the 17 security case. The predecessor statute is Section 601 of the 18 1958 Act which we have as Tab 7. 19 THE COURT: That one that says minimum standards. 20 MR. JOSEPH: The minimum standards is here also at the 21 top of the same page. This is as it is on 9/11 Subdivision A 22 at the top. The administrator of the Federal Aviation 23 administration shall promote safe flight of civil aircraft in 24 air commerce by prescribing -- and if you skip down to 25 subdivision five -- regulations a minimum standards for other SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 68 76EAASEPA1 Argument 1 practices, methods and procedures the administrator finds 2 necessary for safety in air commerce and international 3 security. 4 And when we get to it I'll show that the security 5 regulations cite this statute and the next one which says the 6 same thing as authority for the regulations. So minimum 7