1 43HSSEPT11 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK 2 ------------------------------x 2 3 IN RE SEPTEMBER 11TH 21 MC 97 3 21 MC 100 4 4 ------------------------------x 5 5 March 17, 2004 6 2:30 p.m. 6 7 Before: 7 8 HON. ALVIN K. HELLERSTEIN, 8 9 District Judge 9 10 10 11 11 12 12 13 13 14 14 15 16 16 17 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 2 43HSSEPT11 1 (Case called) 2 THE COURT: I distributed, and I hope everyone has, an 3 agenda of our proposed proceedings this afternoon. As always, 4 if the anyone has anything more to bring up please don't 5 hesitate to do so when we dispatch the business that we have 6 set out for us today. 7 By orders to show cause dated March 1 for MC 97 and 8 March 11 for MC 100, I required various cases by their 9 attorneys to show cause why there should be any longer a 10 suspense calendar and with regard to various kinds of cases why 11 they should remain as active cases. All this is to make sure 12 that we clarify whatever it is that might constitute an 13 underbrush that arises later on to frustrate our ability to 14 handle these cases well and be cleared up. 15 So I would like to do that now. 16 I set out an order of proceeding, which I would like 17 to follow as much as possible. 18 In 1A of the outline, and we will mark this agenda as 19 Court Exhibit A, and in 1A I have listed cases where I have not 20 received a response to my March 1, 2004 order to show cause, 21 and that is 21 MC 97. There are 7 such cases identified by 22 index number, plaintiff, and status, to the extent we know it, 23 before the Victim Compensation Fund. 24 I propose to dismiss each of these 7 cases unless 25 there is someone here who wishes to show cause with regard to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 3 43HSSEPT11 1 any one of them. 2 MR. MIGLIORI: Good afternoon, your Honor. My name is 3 Don Migliori from the Motley Rice law firm. 4 Cases 1 and 4 we did not see on the show cause order 5 and I apologize for not including them in our response but they 6 are in fact BCF claims and they can be dismissed. 7 THE COURT: So they will be dismissed. 8 Thank you, sir. 9 Is there anyone else, sir? 10 MR. McCALLION: Your Honor, Kenneth McCallion. I am 11 here for item number 5, 03 Civ. 7043, and we thought we had 12 filed a response. I could hand a copy up. 13 If I can just explain, we had filed it along with a 14 motion for leave to amend the complaint, specifically to 15 dismiss as plaintiffs in the action or withdraw the named 16 plaintiffs who have pending cases and claims or have settled 17 with the Victims Compensation Fund. However, surviving as 18 plaintiffs is a German insurance carrier and through leave to 19 file the amended complaint that particular motion we are 20 seeking the court's consideration of permitting this case to 21 survive with the withdrawal of all individual cases but leaving 22 one surviving insurance company. 23 THE COURT: Which case do you propose to continue in 24 03-7043? 25 MR. McCALLION: The lead plaintiff as itemized on your SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 4 43HSSEPT11 1 list, item number 5, Gross Handles. 2 THE COURT: And who would Gross Handles be suing? 3 MR. McCALLION: The defendants named in the master 4 complaint. 5 THE COURT:: All of them? 6 MR. McCALLION: 21 MC 97. 7 THE COURT: On what ground do you believe the Gross 8 Handles complaint should continue? 9 MR. McCALLION: As set forth in our papers and in our 10 response basically on the grounds that the insurance I will 11 call it carrier, but actually it's a statutory insurer in 12 Germany, has, both under German law and we believe under U.S. 13 law, an independent right to proceed against the named 14 defendants separate and apart from the individual victims who 15 have filed with the Victims Compensation Fund but, as your 16 Honor knows, any insurance claims would be an offset against 17 that. 18 THE COURT: Let me understand this. Gross Handles is 19 the statutory insurer under German law for Kakia Tatiana Botha, 20 and Constanzi Menzel. 21 MR. McCALLION: I believe those two individuals, your 22 Honor, are surviving family members or beneficiaries. 23 THE COURT: And one has accepted an award, and that is 24 Botha, and one has a proceeding that is pending, is that right? 25 MR. McCALLION: According to the information set forth SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5 43HSSEPT11 1 in the order to show cause. We don't represent those parties. 2 I have no reason to challenge it. We don't represent the 3 individuals, just the statutory insured. 4 THE COURT: Apparently you have a subrogated claim? 5 MR. McCALLION: In essence it's in the nature of 6 subrogation but also under German law an independent claim 7 against the tortfeasor. 8 THE COURT: So your contention is that the statutory 9 insurer over and above what its subrogees may have obtained or 10 are eligible to obtain from the Special Master of the Victim 11 Compensation Fund have an ability to sue defendants in 12 addition. 13 MR. McCALLION: Yes, that is prevailing certainly law 14 in Germany as well as here, and in the interest of equity and 15 fairness as well as your Honor may know any insurance -- there 16 would not be any double recovery or payouts since any amounts 17 awarded under the Victims Compensation Fund would net out any 18 payments made by my client, Gross Handles. 19 THE COURT: That may or may not be but it would give 20 the position of your client a preferred position as against 21 others who enter the fund, or so it can be argued. You will 22 see in response to a category we will be getting to in a few 23 minutes that I am going to invite defendants who believe 24 differently and believe there has been a waiver to bring a 25 motion to dismiss, and that will probably be Mr. Williamson. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 6 43HSSEPT11 1 We will get to that and we will include this case 2 among the others and we will establish a briefing schedule if 3 anyone wishes to bring such a motion. 4 Thank you, sir. 5 I take it that your point is -- Mr. McCallion, may I 6 ask you, is there a separate active lawsuit for Ms. Botha and 7 Ms. Menzel, or are they subsumed in the Gross Handles lawsuit? 8 MR. McCALLION: My understanding is it was solely 9 within the scope of the Gross Handles suit and we are seeking 10 to dismiss those individual claims. 11 THE COURT: So the individual claimants are going to 12 be dismissed and Gross Handles will remain subject to motion. 13 MR. McCALLION: Yes, and we have so moved to amend the 14 caption. 15 THE COURT: All right. I understand that. Thank you. 16 There was another hand. 17 MR. CALVEY: My name is Michael Calvey. I represent 18 the plaintiff in item 1A3 and 10OA on your agenda. 19 I have voluntary dismissal papers in hand which I will 20 be filing as soon as I leave here. 21 THE COURT: Thank you, sir. 22 Since you have not yet filed we are going to dismiss 23 them by summary order. You don't have to bother. 24 Well, file them. We will sign them again. They will 25 be dismissed twice. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 7 43HSSEPT11 1 MR. CALVEY: Thank you, your Honor. 2 THE COURT:: Any other hand? 3 With regard to the cases listed under 1A1 through 7, 4 all but 5 are dismissed or have previously been dismissed or 5 will be dismissed but they are all dismissed with the exception 6 that with regard to number 5 the Botha and Menzel actions are 7 dismissed. Gross Handles remains subject to motion that we 8 that we will discuss in a few minutes. 9 Now, category B collects ten cases -- let me state 10 with number 6 -- oh, I am advised with regard to number 6 there 11 are additional plaintiffs who are subsumed in other categories 12 here, but the dismissal will be as to the named plaintiffs 13 identified in number 6. 14 Now we get to number B and B has ten cases where we 15 have received notices or stipulations of voluntary dismissal 16 and these cases have all been dismissed. 17 Category C makes reference to two cases, actually 18 portions of two cases with consents where consents to dismissal 19 have been filed, although dismissal has not been described in a 20 notice. They will be dismissed. 21 Category D lists three cases which we incorrectly 22 identified on Appendix A to our March 1, 2004 order as having 23 been the subject of claims to the Victim Compensation Fund. 24 Further work on those claims by us and in connection with the 25 office of the Special Master have led us to conclude that no SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 8 43HSSEPT11 1 filings as to these 3 cases were made in the Victim 2 Compensation Fund and hence they are removed from Appendix A. 3 These 3 cases will continue. 4 If I am wrong about that, Mr. Williamson or others, I 5 am sure there will be motions. But our present -- 6 MR. MIGLIORI: If I may, your Honor, Falkenberg is a 7 case, so the record is very clear, there were four people in 8 that family that perished. Three of them did file Victims 9 Compensation Fund claims that were part of that caption and did 10 go into the fund. I don't know if the Falkenberg complaint 11 filed with this court listed that four but there are three in 12 that family that did go into the fund under the same legal 13 representative. This case though pending here with this civil 14 action number never did go into the fund. It's accurately in 15 this category or subcategory of cases. 16 THE COURT: What is Falkenberg's first name? 17 MR. MIGLIORI: Ruth Falkenberg is the legal 18 representative for Leslie Wittingham, her husband Charles, and 19 two daughters Cia and Dana. 20 THE COURT: And who is survived and not in the fund? 21 MR. MIGLIORI: Ruth filed on behalf of Leslie 22 Wittingham only. 23 THE COURT: I have it, yes. No claim was filed for 24 Leslie Wittingham. The other three cases will be dismissed. 25 The case for the benefit of the estate of Leslie Wittingham SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 9 43HSSEPT11 1 remains. 2 MR. MIGLIORI: Thank you, your Honor. 3 THE COURT: And our order will be precise as to that. 4 Category E collects cases in dispute, which are 5 subject to motion and that will include also the Gross Handles 6 lawsuit. 7 As to these lawsuits collected in 8 sub-captions, I 8 think there will be motion practice. I don't think it's 9 suitable for me ex-parte sua sponte -- to use fancy Latin words 10 that I don't know have full meaning anyhow -- to dismiss them. 11 People may have different interpretations of what they did or 12 think they are entitled to do and so I invite the Port 13 Authority, who has been an active protagonist with regards to 14 such claims as this, to file a motion to dismiss. 15 Mr. Williamson, do you want to give me a date? 16 MR. WILLIAMSON: Yes, your Honor, thank you. 17 What we would like to do, because there is some 18 disagreement as to what these people did or didn't do with the 19 BCF, and we don't know all the facts, is to be able to obtain 20 documents from them with respect to what they did file or 21 didn't file depending on how they characterize it, whatever it 22 is that was transmitted to and from these people and these 23 claimants and the BCF, and then take brief depositions of each 24 of them and then make the motions. We have not sought that 25 discovery up until now because we didn't want to waste anyone's SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 10 43HSSEPT11 1 time. 2 THE COURT: You may not need depositions it seem to 3 me. It seems to me if you proceeded on paper discovery by and 4 large you should be able to know your position and make your 5 motion. I could see where there might be some dispute, and 6 then I don't know if you need a deposition or not. 7 MR. WILLIAMSON: You may be right, but we have heard 8 from many sources that in addition to the paper trail there are 9 conversations that take place and have taken place that may 10 well impact upon the motion. 11 THE COURT: It would be hard to believe that 12 conversations between representatives and the Special Master or 13 his representatives would constitute a claim because he has 14 regulations and claims have to be in writing. So I think the 15 writings are going to control. 16 I think, Mr. Williamson, if a lawyer has a 17 conversation with Mr. Feinberg to find out the lay of the land 18 doesn't constitute a filing of the claim. The definition in 19 the instructions and regulations of what a claim consists of -- 20 MR. WILLIAMSON: We understand, but given what we know 21 about some of the conversations it may well impact upon what 22 later construction is sought to be given to documents that 23 actually exist. So what we thought we would propose to your 24 Honor today is that we proceed initially exactly as you said 25 and ask for any written documentation that exists. If there is SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 11 43HSSEPT11 1 any particular plaintiff, one or more, as to which we think we 2 would need depositions we would ask them if they would do that 3 on consent. If they want to oppose it we would come back to 4 you. It may be as to one or more we don't need, in our view, 5 any deposition and we can just move, as you say, on the 6 documentary record. 7 THE COURT: I would like you to suggest a schedule 8 whereby you would be getting documentary discovery and filing a 9 motion with respect to the documentary discovery and with 10 regard to depositions to ask for a conference before you take 11 them. 12 MR. WILLIAMSON: We can do that. We can get out a 13 written request to each of these now that the list is narrowed, 14 if that is okay, within two weeks, and whatever they say is 15 reasonable for providing us with the documents perhaps another 16 two weeks. 17 THE COURT: Why don't you propose a schedule trying to 18 work out as best you can with counsel for the claims involved a 19 reasonable schedule and submit it, let's say, by next 20 Wednesday. 21 MR. WILLIAMSON: We will do that. That is fine. We 22 will reach out to each of them. 23 THE COURT: Good, thanks. 24 Is the city going to be making motions? Is anyone 25 else making motions? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 12 43HSSEPT11 1 MR. BARRY: Your Honor, Desmond Barry. 2 In my capacity as defense liaison counsel, I think the 3 Gross Handles case might present, to use another Latin phrase, 4 a sui generis issue in terms of whether they are entitled to 5 subrogation so I think there is going to have to be some 6 discovery perhaps of the state company or whatever it is that 7 is making that claim. And I don't know what other defendants 8 may wish to make that motion. 9 THE COURT: Why would you think you need discovery? 10 MR. BARRY: I don't know what this company is to tell 11 you the truth. Normally a life insurance company is not 12 entitled to subrogate. 13 THE COURT: Why don't we start with Mr. McCallion 14 presenting you, let's say, in a week with his contentions why 15 there should be a right on the part of Gross Handles 16 notwithstanding the statute via the Air Transportation and 17 System Stabilization Act, in terms of that statute why there 18 should be a right in Gross Handles to have a lawsuit with 19 respect to any, I will call it, subrogee who has elected to go 20 into the fund. 21 MR. BARRY: That is fine. 22 THE COURT: Can I ask you on or before, let's say, a 23 week from tomorrow to give Mr. Barry a statement of contention? 24 MR. McCALLION: Your Honor, I would request more time 25 respectfully on two grounds. One is -- SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 13 43HSSEPT11 1 THE COURT: You have to consult -- 2 MR. McCALLION: I have to communicate with counsel in 3 Germany where they are basically local counsel. 4 Secondly, I am on trial on another matter. 5 Is a month too much time? 6 THE COURT: Well, how about two weeks? Two weeks from 7 Friday. 8 MR. McCALLION: Yes, sir. 9 THE COURT: April 2 deliver a statement of contention 10 to Mr. Barry and to Mr. Mulhern, and then, Mr. Barry, if you 11 want discovery call Mr. Leighton and schedule a conference 12 between you, between you and Mr. McCallion and anybody else, 13 otherwise propose a time to make a motion. 14 MR. BARRY: Fine. 15 THE COURT: I shouldn't think there is discovery 16 needed here. 17 MR. BARRY: Perhaps not but, as I say, I don't 18 understand what the actual claim is and so I think your 19 suggestion is a good one and I don't know what the other 20 defendants know about it either. I don't even know what the 21 amount is. 22 THE COURT: Let's see what comes out in the statement 23 of contention and ask for a conference after that. 24 MR. BARRY: Fine. 25 MR. NOLAN: Your Honor, Kenneth Nolan. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 14 43HSSEPT11 1 Just on the motion by the Port Authority, are there 2 going to be separate motions for each case, your Honor? 3 Because we do have -- 4 THE COURT: I tell you, we should have separate 5 motions for each case, a common brief and a common affidavit as 6 to all, and if there is anything in particular with regard to 7 each case a supplementary affidavit or declaration that covers 8 the particular case. 9 MR. NOLAN: Your Honor, is my understanding that the 10 Port Authority is the only defendant making that motion? 11 THE COURT: Anybody in this large room and whoever 12 wants to make the motion is entitled to make the motion. Mr. 13 Barry is making the motion in one case and maybe the others. 14 Whoever does it the dates Mr. Williamson set down is binding on 15 everybody. So draw your order in terms of any defendant. 16 Mr. WILLIAMSON: Yes, your Honor. 17 MR. NOLAN: The only other thing I want to point out, 18 your Honor, is that the fund is closing down June 15th, so 19 there is some urgency in getting these motions resolved if the 20 cases are dismissed in this court. I don't know what 21 Mr. Feinberg would do, but obviously I would want some type of 22 decision before that date. 23 THE COURT: I tell you, there is a case pending 24 against Mr. Feinberg, and you can have a very strong belief 25 that there will not be a case before me. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 15 43HSSEPT11 1 MR. NOLAN: What I am saying, Judge, if you dismiss 2 these cases in this court I don't know whether Mr. Feinberg 3 will entertain a nunc pro tunc application by some of these 4 people. 5 THE COURT: That is his problem, his issue, it's not 6 mine. 7 MR. NOLAN: Thank you, your Honor. 8 MR. BARRY: Just to clarify, your Honor, any other 9 defendants that may want to join in the motions being proposed 10 by Mr. Williamson would be bound by the schedule and if you can 11 coordinate with me on that, Mr. Williamson, I would appreciate 12 it. 13 Mr. WILLIAMSON: Absolutely, of course. 14 MR. BARRY: So I can let everybody else know. 15 MR. MULHERN: I would also like to know what the 16 schedule is -- 17 THE COURT: You are going to be served in this. 18 That takes us through item 8. 19 Now we come to subparagraph 2 on page 4. There are 20 three cases that present unique problems. In these three 21 cases, if I remember them correctly, a spouse has obtained a 22 recovery or has a pending claim looking to have a recovery from 23 the Victim Compensation Fund. However, parents of the deceased 24 have pending lawsuits before me and they are in respect of the 25 same decedent and it may be that I reversed who has made a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 16 43HSSEPT11 1 claim and who has a pending lawsuit. But I suspect that 2 various defendants will be interested to move to dismiss the 3 active lawsuits by reason of waiver. 4 And if I am correct in that, Mr. Williamson, and Mr. 5 Barry, I think you will want to include these in your motion 6 practice. They will require different briefings and the like, 7 and I think they should be presented by different papers but 8 with the same schedule. 9 Mr. WILLIAMSON: We will make the same initial 10 documentary discovery request of them and see what else we 11 need, if anything. Just treat them the same? 12 THE COURT: Yes. 13 Mr. WILLIAMSON: Yes, thank you. 14 THE COURT: If there is any need of a deposition here, 15 and the problem may arise in a conflict of jurisdictions with 16 regard to probate in surrogate matters and the practices of the 17 Victim Compensation Fund with regard to who in the 18 determination of the Special Master is entitled to act as a 19 claimant, but I will await briefing of the papers that say more 20 on this particular issue. I think it could be especially 21 difficult. 22 Mr. WILLIAMSON: It may be more properly that any 23 individual who believes he acted without authority to file a 24 claim and obtain money may actually have a claim against such 25 person. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 17 43HSSEPT11 1 THE COURT: That is one part of it, but there is also 2 an argument that the absent claimant is not the subject or the 3 object of a waiver if the person electing to go to the Victim 4 Compensation Fund is not the legally recognized representative 5 of the deceased according to the laws that operate in the 6 application and jurisdiction. I don't know. And there may be 7 a problem in federal and state jurisdiction as well in this 8 regard. 9 I just raise these issues because they come to mind, 10 not that I have thought very much about them. 11 Mr. WILLIAMSON: You are right, we will need discovery 12 as to who told what to whom and is it all consistent or not. 13 THE COURT: Start with the documentary stuff and let's 14 see where we go from there. 15 Mr. WILLIAMSON: Yes, your Honor. 16 THE COURT: Now we are at 21 MC 100 Roman II on the 17 agenda. 18 Before I go onto that one, is there anything more on 19 21 MC 97 that anyone wishes to bring to my attention? 20 We are in the respiratory cases. 21 These came around, as a point of history, in almost a 22 serendipitous fashion. When I removed the cases from -- that 23 is, when cases were removed from the state court they came in 24 the status they had in state court and many of them were on a 25 suspended list, which I simply carried over without giving much SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 18 43HSSEPT11 1 thought to the issue. My intention was focused on whether and 2 to what extent those cases should be remanded and I issued a 3 decision with regard to the remand and that issue still remains 4 pending with the Second Circuit. 5 After thinking not too much about this special 6 suspended list, but then starting to think about it, it 7 occurred to me that there was not much more reason, on second 8 thought, to have a suspense list in these respiratory cases 9 than for the death cases. And so I issued my amending and 10 updated order of March 11, 2004 to deal with these cases. 11 Let me say a further word about them, because they 12 fall into different categories. 13 As I understand the practice and procedure of the 14 Victim Compensation Fund, any rescue worker defined as a 15 fireman or policeman or construction worker, and perhaps some 16 other categories, who are on the site and who later claimed a 17 respiratory injury can be eligible, if they were on the site 18 within '96 hours of the 9/11 impact, and at some later point 19 suffered a determination of disability. These are somewhat 20 different categories from those I defined in my jurisdictional 21 decision. 22 I understand that there are a number of cases, not too 23 many, before the Special Master that are still dealing with 24 eligibility requirements. In other words, is the claimant a 25 rescue worker? Has the claimant been on site in the first 96 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 19 43HSSEPT11 1 hours? Is the worker, although not a rescue worker, otherwise 2 eligible under the rules of the Special Master? And perhaps 3 there might be other criteria as well. 4 If a person had sought to file a claim but such a 5 claim is not received because the person is determined not to 6 be eligible, there may or may not be a waiver in relationship 7 to the right to bring a civil action. As I ruled in a number 8 of my decisions, Congress intended to provide an alternative 9 but one may argue that if one is determined not to be eligible 10 for one prong of that alternative, there may not be a waiver in 11 respect of the right to the other prong. It's a special 12 situation different from those created in MC 100 where you were 13 dealing with people who died at the time of the terrorist 14 impacts, or so it could be argued. 15 Now, I am corrected, I referred to the wrong death 16 claims as MC 100 and I meant MC 97. 17 My order of March 21, 2004 requires people to show 18 cause why more time should be granted to leave cases on a 19 suspense calendar. And my thinking about it is that the only 20 such category of cases that might argue for an enlargement of a 21 suspense calendar period might be those cases, if any, where 22 eligibility has not yet been determined. Any other case where 23 there is a claim pending before the Victim Compensation Fund or 24 where there has been an award will be removed from the suspense 25 calendar. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 20 43HSSEPT11 1 Now, is there anyone here, because I have not received 2 any papers, is there anyone here who wishes to show cause why a 3 case now on the suspense calendar should continue on the 4 suspense calendar? 5 MR. PENSON: Yes, Judge, Dominique Penson, and I am 6 here instead of Michael Barish as liaison counsel for the 7 respiratory cases. 8 Really for the reasons that you stated, speaking for 9 my firm, we have 366 cases on the suspend calendar. As to 174 10 of them they fall into the category of cases that you just 11 identified. In approximately 130 of the cases we have yet to 12 hear anything from the fund. We don't know whether these 130 13 claimants will be deemed eligible. If they are deemed 14 ineligible, for example, because they are of the type of rescue 15 worker that you identified, utility workers, for example, who 16 were working on repairing utilities and may not be considered 17 by the Special Master to be eligible under the fund, or whose 18 proof of presence is not adequate or deemed adequate by the 19 fund, and for that reason are found ineligible, we believe that 20 they would not be precluded from pursuing a claim, for example, 21 against the City of New York. 22 THE COURT: When is the Special Master going out of 23 business? 24 MR. PENSON: Well, according to the guidelines they 25 published they believe they will have final determinations as SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 21 43HSSEPT11 1 to all the cases, including appeals, by the 1st of April. 2 THE COURT: So how are you going to deal with the 3 situation if you don't know now? 4 MR. PENSON: Judge, we were hoping you would reinstate 5 your order of February 27 extending the suspense calendar until 6 April 16. 7 THE COURT: Not a chance. 8 MR. PENSON: By then, Judge -- 9 THE COURT: Not a chance. 10 MR. PENSON: The problem for us is that of the 130 we 11 haven't even heard anything. 12 THE COURT: Then you identify specifically those cases 13 where you need an enlargement because you haven't heard. It 14 may be you haven't heard because your claims are not sufficient 15 or you haven't made enough of a presentation of eligibility. I 16 will not indulge you. 17 MR. PENSON: Part of the problem is that in the past 18 the Special Master would initially communicate with the 19 claimant's representative and indicate whether the claimant was 20 eligible and then there would be a determination as to whether 21 they were entitled to an award and what that award was. 22 Sometime along the process they stopped doing that, they 23 stopped giving you this initial feedback as to whether you were 24 eligible or not. So now we have no way of knowing whether 25 somebody is eligible and therefore would be pursuing it if they SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 22 43HSSEPT11 1 are ineligible. 2 THE COURT: I reject that. There are all kinds of 3 ways to find out. I will not give you a wholesale extension. 4 MR. PENSON: Judge -- 5 THE COURT: Believe me. I have thought about it. You 6 will not get a wholesale extension. If you don't show cause as 7 to specific cases with regard to eligibility determinations 8 that have not been made all cases will be dismissed. 9 MR. PENSON: Let me finish telling you about the rest 10 of these 366 cases and you will see the problems multiply. 11 As to the 40 cases that I mentioned, those were 40 12 cases where the Special Master initially deemed the claimants 13 ineligible. Those would be cases that we might therefore be 14 pursuing now before you. However, we have appealed, and to the 15 extent that we have gotten feedback on those appeals, the 16 feedback has been positive and we believe ultimately all 40 of 17 those cases will be deemed eligible because whatever the 18 shortcomings found by the Special Master are being dealt with 19 to the Special Master's satisfaction. And we believe all those 20 cases will be deemed eligible and we will be able to withdraw 21 all 40 of those cases and we hope, Judge, that if the process 22 is just another 30 days and is allowed to play out, we will be 23 able to withdraw all 130 of these other cases. 24 If the plaintiffs are forced to choose now, Judge, if 25 we are forced to go forward with the cases here, then arguably SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 23 43HSSEPT11 1 they become ineligible before the Special Master. But if the 2 Special Master deems those people eligible, then we can you 3 withdraw from here. Thus far we have withdrawn 455 cases. The 4 only cases we have not withdrawn are these 366 that I now 5 mention. 6 I have told you about 174. The other 192 are cases in 7 which we have submitted part A of the application to the 8 Special Master which is the most basic biographical 9 information. Those cases are now abandoned. We have followed 10 up with these clients. We have tried to obtain from them the 11 rest of the applications, the proofs of presence, the financial 12 records, the medical records. We have not been able to get 13 those people, despite telephone calls and letters, to cooperate 14 with us. Because of the short notice I don't have for you 15 today a motion to withdraw as counsel on those 192 cases but we 16 will have it for you, Judge, by no later than Monday. But I 17 would ask as for those cases too -- 18 THE COURT: I am not going to let you out of the case 19 at this time. We don't have time. This has been percolating 20 for some time and I don't think you have done your work with 21 this Victim Compensation Fund or with me. 22 MR. PENSON: Judge, if you give us, at least as to 23 those, an opportunity to present that to you on papers in a 24 motion to withdraw, then we can deal with your Honor's 25 concerns. As I say, we will have that motion ready for you for SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 24 43HSSEPT11 1 Monday. I would ask pending that application that those 192 be 2 permitted to stay on the suspense calendar. As I say, as to 3 the other 174 I believe -- 4 THE COURT: Are these 192 cases that have been 5 determined as eligible? 6 MR. PENSON: They couldn't be because there is only 7 Part 1 of the application. None of these is in there. 8 As far as the rest is concerned those are abandoned 9 cases. But we believe the cases that are before you have also 10 been abandoned by these people. That is what we have been 11 trying to find out through phone calls, through letters, but we 12 haven't been able to get the cooperation of any of these 13 people. 14 THE COURT: Why shouldn't I just simply dismiss them? 15 MR. PENSON: Well, Judge, it may well be that is what 16 you think needs to be done. Let us show you what we have done 17 on those cases and I think you will be in a better position to 18 judge what should be done. But as to the other 174, Judge, I 19 think if you give us this one more month all of those cases may 20 disappear from the docket. I think they will. In short, 21 Judge, we might be able to remove all of the remaining cases 22 without any litigation. 23 THE COURT: What is to prevent the situation arising 24 of your trying to get leverage of a better award from the 25 Special Master as a tradeoff with respect to litigation? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 25 43HSSEPT11 1 MR. PENSON: I am not sure I follow. 2 THE COURT: You see what you get before the Special 3 Master. If you like it you take it. If you don't like it you 4 drop it and go to court and then you defer your eligibility 5 determination to give you the needed flexibility. 6 MR. PENSON: Judge, as I understand the rule, whether 7 you get a dollar or $1 million, once you are deemed eligible 8 and they deem the application substantially complete, that now 9 means they are going to make an award and you don't know what 10 the award is and you are eligible and you are submitting 11 yourself to that claims process, that is it, that is your 12 exclusive remedy. You will have to withdraw the case pending 13 in federal court. 14 THE COURT: But what you are doing is compressing your 15 determination of eligibility with the award of the case by 16 holding up filing and taking advantage of the last few days of 17 the Special Master. 18 MR. PENSON: All 174 of these cases, all of the papers 19 are in. The only holdup is that the fund is dealing with so 20 many cases -- as been reported, I think they are dealing with 21 3000 cases and time is short and they haven't gotten to us. 22 But all of the applications had to be in, the preliminary 23 applications, by December 22, supplemental applications by 24 January 22. Everything was done. They have all the paperwork. 25 It's just a matter of getting them to communicate with us. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 26 43HSSEPT11 1 THE COURT: Why don't I dismiss the case and give you 2 a right to restore? 3 MR. PENSON: It's another way of doing it, Judge, but 4 I submit it's just another 30 days and we will know because 5 they have told us by April 1 they will have dealt with all of 6 the applications, including the appeals. And we have been 7 seeing that they have been dealing to the extent there have 8 been appeals, the appeals have been getting resolved. 9 THE COURT: What appeals? 10 MR. PENSON: I mentioned the 40 cases that had been 11 deemed ineligible. We appealed those cases and to the extent 12 we have gotten feedback on those appeals -- 13 THE COURT: The appeals within the Victim Compensation 14 Fund procedure? 15 MR. PENSON: Yes, sir. I believe all of the appeals 16 are going to be successful in the end. I believe all 174 of 17 these claimants are going to be found eligible by the fund and 18 we are going to be able in a month's time to withdraw those 19 cases from this docket. 20 THE COURT: What you told me is that you have 21 eliminated 455 cases. 22 MR. PENSON: 455 thus far. 23 THE COURT: And you have 366 to go. 24 MR. PENSON: And we might be able to knock them all 25 out, Judge, without any litigation if you give us this one more SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 27 43HSSEPT11 1 month. 2 THE COURT: Mr. Williamson, any comments? 3 Mr. WILLIAMSON: We take no position. As your Honor 4 knows, it's at odds with our understanding and interpretation 5 of the statute. 6 THE COURT: This is somewhat different. 7 Mr. WILLIAMSON: We take no position. I believe that 8 he is saying he is appearing for Michael Barish and my 9 understanding is that checking with my colleagues that we have 10 no cases with Mr. Barish. So it really would be inappropriate 11 for us to take a position. 12 MR. SHAFFER: Gary Shaffer, your Honor. 13 We are sympathetic to your Honor's position with 14 regard to plaintiffs having chosen or having elected a remedy 15 and thereby having chosen to go to the fund. 16 THE COURT: Really it's not a choice. They would like 17 to go to the fund but they don't know if they are eligible. 18 MR. SHAFFER: We understand that, your Honor. We have 19 been in conversation with Mr. Barish and with the attorneys 20 from the Sullivan firm and we understand that in fact they are 21 waiting for determinations of eligibility. We believe that in 22 fact many of these instances whether they are found to have 23 been eligible or not at this point they will have in fact made 24 their election. However, it may also be the case that the 25 court doesn't need to address that and rule on that issue SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 28 43HSSEPT11 1 today. 2 THE COURT: You think I should wait? 3 MR. SHAFFER: I think administratively it helps move 4 things along. Legally it may not make that much difference 5 though clearly our position, I do not mean to imply by that if 6 plaintiffs are found ineligible and seek to proceed in this 7 court that we wouldn't at that point move to dismiss under the 8 notion that they in fact had made their election of remedy 9 given your Honor's prior rulings with regard to the December 22 10 and January 22 deadlines. 11 THE COURT: If I enlarge the period in the suspense 12 calendar for these 192 cases, or these 366 cases, I think you 13 are going to have to enlighten me a little more on the 14 breakdown. But if I enlarge the period of suspension for any 15 number of cases it will of course be without prejudice to your 16 suggestion and Mr. Williamson's suggestion that there is no 17 real reason why I shouldn't enlarge it to the end of the life 18 of the Victim Compensation Fund, that is, to one April or some 19 period after that. 20 MR. SHAFFER: Are you suggesting extending it into 21 June? 22 THE COURT: No, one April and some administrative 23 period after that, let's say to the 15th or so. 24 MR. SHAFFER: I think administratively that might 25 serve our purposes in terms of resolving some of the loose ends SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 29 43HSSEPT11 1 we are here to assist on. As a practical matter, as your Honor 2 noted, there are active cases that appear in fact for all 3 practical purposes to be suspended cases and then there are 4 suspended cases on appendix B that presumably will also take 5 advantage, as it were, of the same extension. 6 THE COURT: Let me come back to you, Mr. Penson. 7 Are all the 455 cases that are eligible for being 8 dismissed in fact dismissed? 9 MR. PENSON: I believe so, your Honor. I believe 455 10 have been dismissed. Those were all withdrawn, as I 11 understand. 12 THE COURT: And there have been notices of withdrawal 13 that have been filed and signed by me? 14 MR. PENSON: That is my understanding, Judge. 15 THE COURT: And of the 192 cases where you haven't 16 received data from your clients, I propose that these too are 17 to be dismissed and I will give your clients another ten-day 18 period after the dismissal order to show cause why they should 19 not remain in some kind of active status by supplying you with 20 all requested data. 21 MR. PENSON: When you say dismissed, dismissed from 22 here even though those are cases that have not been filed with 23 the BCF? 24 THE COURT: There is apparently no filings anywhere 25 and you are not being instructed and they are not acting as SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 30 43HSSEPT11 1 they should in relationship to a filed case in my court. All 2 these cases are filed in my court. There is an order to show 3 cause that have been presented and you have been making efforts 4 to be in touch with them. So we will design the order but the 5 last order will be if they fail their cases will be dismissed 6 even though they may not have a good case with a perfected 7 claim with the Victim Compensation Fund as well. 8 MR. PENSON: Okay. 9 THE COURT: But I don't want to be nursemaid to these 10 cases. 11 MR. PENSON: Should I understand -- forgive me if I 12 seem a little fuzzy -- that this ultimate order that you are 13 proposing would take effect after the April 16 deadline or 14 sometime between now and then? 15 THE COURT: Between now and then. 16 MR. PENSON: All right. 17 THE COURT: Because what I foresee and what I don't 18 want to happen is that there is going to be a period of 19 uncertainty in mid-April and I don't want that. I just want a 20 ministerial act at that time subject to whatever motions that 21 Mr. Shaffer or Mr. Williamson will be making. 22 This leaves only 174 cases. 23 MR. PENSON: Judge, if I may for a second, and I 24 apologize, Judge, that I am not as familiar with the total 25 number of cases as Mr. Barish might be. I know that we are SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 31 43HSSEPT11 1 here as liaison counsel. I don't know whether the list we are 2 talking about -- I know of the number of cases from my firm and 3 those are the numbers I have given you, such as 174. I don't 4 know, for example, to what extent the office of Sullivan Papain 5 has cases similarly situated and the same for the office of 6 Kedovsky & Gentile. I understand they have respiratory cases 7 as well. 8 THE COURT: It's there job to be here. 9 MR. MARCOWITZ: Edward Marcowitz from Sullivan Papain. 10 I faxed over the list to chambers this morning of our 11 cases. It's approximately 150 cases. We have discontinued 12 about 300 cases with your Honor already, which the city has 13 signed off on and so has your Honor. I concur with what Mr. 14 Penson has told the court about the fund. We are anticipating 15 all 150 of our cases remaining with the funds in the next 2 to 16 3 weeks will be deemed eligible and will be all withdrawn, and 17 I think another 3, 4 weeks administratively will make sense 18 because I think this will be wrapped up by that time and that 19 is what the fund told me as well. 20 All the appeals we have spoken about are paper 21 appeals, which is the 30 boxes of documents that my firm has 22 sent down need to make their way into the fund's files of our 23 clients, and as that happens we get reversals of the denial of 24 eligibility and then we get an eligibility letter and we 25 anticipate the award. Some of the eligibility letters come SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 32 43HSSEPT11 1 with the award in them and some say we reverse our decision and 2 award will follow. 3 I certainly think another 2, 3 weeks would be 4 beneficial in terms of most of this will be wrapped up and I 5 anticipate giving the voluntary dismissals to the court within 6 that time frame. 7 THE COURT: What is the third category of cases? 8 Who has the third category of cases, Kedovsky? 9 MR. PENSON: My understanding is they have some 10 respiratory cases as well, but I am not sure. 11 MR. SHAFFER: I believe all those actions have been 12 discontinued by Kedovsky & Gentile. There are, I believe, 13 about 30 plaintiffs under the Stevenson caption by the firm of 14 Tolkin and they are contained in your Appendix B, and those are 15 firefighters with alleged respiratory injuries and they have 16 filed claims with the fund. I have not personally spoken with 17 counsel there and I don't know the status of all their cases or 18 their fund claims. 19 Mr. WILLIAMSON: Now that the universe is expanded 20 somewhat at least as to Sullivan Papain, we did have some 21 respiratory cases for our clients with that firm. Just this 22 week I did receive a stipulation, which I signed, dismissing 23 many of those but I don't know as I stand here today whether it 24 covered all of them or whether there is anything left. To the 25 extent there is anything left we would oppose the application SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 33 43HSSEPT11 1 because we believe that those cases should be dismissed. 2 I will confer with my colleagues, but I am pretty sure 3 we are right. As to Mr. Gentile's firm I don't think there are 4 any cases, although I would like to double-check the list. As 5 I said earlier, there are none with Mr. Barish's firm. With 6 Sullivan Papain we did have some, but I don't know if they have 7 any left. If they do we would definitely oppose the request 8 because then we would have an interest and we would believe, 9 and do believe, that they should be dismissed. 10 MR. MARCOWITZ: The anticipation is there will be four 11 cases and they are on the list I faxed over this morning as 12 well that were not presented to the fund and those cases I 13 believe are stayed by operation of the decision pending in the 14 Second Circuit. But they were never presented to the fund so 15 they are waiting for the decision on the remand motion. They 16 are with your firm. 17 THE COURT: They have never been presented to the fund 18 so they are active cases, active in my court or in the state 19 court. 20 MR. MARCOWITZ: As soon as the decision comes down, 21 sure. 22 THE COURT: So they are clearly available. 23 MR. MARCOWITZ: Yes. 24 Mr. WILLIAMSON: They don't need to be on a suspense 25 docket. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 34 43HSSEPT11 1 MR. MARCOWITZ: Whatever is still going on with the 2 lawsuit, Paul Marber is handling that, I am not. There is no 3 reason to be on the suspence docket. 4 THE COURT: You will remove them. Submit a document 5 that says it. 6 Do you know which ones they are now? 7 MR. MARCOWITZ: I believe it is in my file. I can get 8 a letter to chambers this afternoon or tomorrow. 9 MR. SHAFFER: Those are the plaintiffs under the 10 Clinton buyer action and some of those have been discontinued 11 as well. I believe those were all active cases and they 12 haven't been in the suspense docket. 13 MR. MARCOWITZ: Only to the extent of whatever the 14 appeal is going on. 15 THE COURT: You have some cases that have out and out 16 been rejected. 17 MR. MARCOWITZ: That is a denial of eligibility. It 18 comes as a rejection letter. In the days following we either 19 send down supplemental information if the fund needs it or by 20 the time they get their documents scanned and get into file we 21 get a letter saying they have reversed their position. It's 22 not we have to go to appeals on all these matters. It's just a 23 matter of the paperwork catching up with the file. 24 THE COURT: And some you say come out of the BCF. 25 What does that mean? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 35 43HSSEPT11 1 MR. MARCOWITZ: They are discontinuing altogether. In 2 the next week or so I should be filing an additional stip with 3 the court on all the cases. 4 THE COURT: They received awards? 5 MR. MARCOWITZ: There are cases where the injuries 6 were insignificant enough that the clients will be 7 discontinuing voluntarily. They decided not to make a claim 8 with the fund and they are going to be discontinuing their 9 case. 10 THE COURT: So those are going to be discontinued 11 here. 12 MR. MARCOWITZ: I will have a stipulation to the court 13 within a week or so. 14 THE COURT: So all those in the box coming out of BCF 15 will be dismissed. 16 MR. MARCOWITZ: Dismissed or voluntarily discontinued. 17 I would like to make it with the stipulation and just waiting 18 for the clients to sign off and we will send another stip to 19 the court. 20 THE COURT: And there is a category maybe under the 21 column. 22 MR. MARCOWITZ: They will probably be coming out. 23 They haven't responded to the letter. I was being as candid 24 with the court as I can be. 25 THE COURT: They also will be dismissed. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 36 43HSSEPT11 1 Thank you. 2 If I were to grant Mr. Penson's suggestion of 3 continuing this suspense list you in the meantime, both of you, 4 would be submitting notices to me taking people out. 5 MR. MARCOWITZ: That is right. 6 MR. PENSON: Yes, sir. 7 THE COURT: All right. 8 MR. MARCOWITZ: On my list there are a few changed to 9 eligible. That was actually changed this morning because in 10 yesterday's mail we got the reversals. I am anticipating the 11 floodgates to open any day now. 12 THE COURT: But the eligibles should be taken out. 13 MR. MARCOWITZ: They will be. We will be sending you 14 notification notices. 15 THE COURT:: Now, this leaves only the 192 cases that 16 involve people who probably are not interested to make claim or 17 sue. 18 MR. PENSON: I suspect that is right. 19 THE COURT: Why shouldn't we just draw the proper 20 conclusion and dismiss them? 21 MR. PENSON: Judge, all I can say in response is 22 that -- 23 THE COURT: Because if you move to remove yourself as 24 counsel at this point in time you leave them in limbo and while 25 you have a relationship of counsel you are able to write to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 37 43HSSEPT11 1 them and tell them very clearly through that relationship that 2 the court has issued an order dismissing the cases and if you 3 want me to try to get them restored you have to supply me very 4 promptly with documentation or at least a declaration. 5 MR. PENSON: It seems to me, Judge, that such a motion 6 would at least present them -- they would be served with 7 papers -- with one last opportunity to wake up and do something 8 about this case if they seriously intend to and if they didn't 9 respond to such a motion, it would be that much more compelling 10 evidence that they have completely abandoned their claims. 11 THE COURT: This is a motion to be relieved as 12 counsel. 13 MR. PENSON: Yes, your Honor. 14 THE COURT: This leaves them, and leaves me, in an 15 unsatisfactory situation. I need you to identify these 192 16 plaintiffs or claimants. 17 How long will it take you to do that? 18 MR. PENSON: We can have it to you at the beginning of 19 next week. 20 THE COURT: Okay. Tuesday, the start of business, by 21 10 o'clock, fax over the list. We are going to dismiss these 22 cases for lack of prosecution and we will provide that if they 23 want to restore them they will have to move for probably 24 another week. 25 I am going to finish up in about 5 or ten minutes. I SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 38 43HSSEPT11 1 just need a recess to make sure the notes all jibe and I will 2 be right back. 3 (Recess) 4 THE COURT: Mr. Penson, by start of business March 23, 5 by 10 o'clock, you will have sent electronically to Ms. 6 Leighton the identities of all 192 cases which we will then 7 dismiss. 8 I will grant your request to maintain the status we 9 have now as listed in Appendix A and B -- with certain 10 exceptions that I will mention in a few minutes -- until April 11 9, provided that on April 9 we receive from you, either by fax 12 or electronic communication, a letter which represents the 13 specific names of plaintiffs who will be active together with a 14 statement of each, as to each, if that claimant ever filed 15 before the Victim Compensation Fund and if the claimant did, a 16 copy of the determination of ineligibility. 17 Is that clear, folks? 18 MR. PENSON: Yes, your Honor. 19 THE COURT: And I ask now, Mr. Shaffer, Mr. 20 Williamson, does that give you the information you need should 21 you want to make any motions? 22 Mr. WILLIAMSON: I think it does at least at the 23 initial stage. And I also checked with him as to the docket 24 and he will confirm what I said -- 25 THE COURT: What other information do you need? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 39 43HSSEPT11 1 Mr. WILLIAMSON: That depends on whether what we 2 receive in the way of a response is consistent with our own 3 information that we have been able to glean. 4 THE COURT: But if he gives you a copy of the 5 determination of the Victim Compensation Fund of ineligibility 6 that should give you the information. 7 Mr. WILLIAMSON: I think that and what was filed. 8 THE COURT: Mr. Shaffer. 9 MR. SHAFFER: Is this intended to cover all parties on 10 appendices A and B? 11 THE COURT: Yes. 12 Now I have another point with those parties, 13 particularly those in the active lists. 14 Both as to Appendix A and B, there are people whose 15 status can be changed and if Mr. Penson, Marcowitz, Mr. 16 Williamson and Mr. Shaffer will stay behind we will identify 17 the particular ones, and anyone else, who in our judgment whose 18 status can be changed and either an active case can be pursued 19 or more likely they can be dismissed. 20 I will ask with regard to those cases that the 21 requisite notices be put in as soon as possible. 22 That completes the work that I want to accomplish 23 today. 24 Is there anything I haven't done? 25 MR. MULHERN: Good afternoon. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 40 43HSSEPT11 1 I have just been asked to clarify that the cases on 2 the agenda under 21 MC 97, item 1E, the cases in dispute 3 subject to motions, at present are we correct that the court 4 records identify these cases in 1E as active subject to the 5 motions that might be made? 6 THE COURT: Active here but withdrawn -- 7 MR. MULHERN: Active here, yes. 8 THE COURT: Yes. 9 Anything else? 10 I think we are finished. 11 12 13 - - - 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300