1 352ksepa 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK 2 ------------------------------x 2 3 IN RE SEPTEMBER 11 LITIGATION 21 MC 97 3 4 ------------------------------x 4 5 New York, N.Y. 5 May 2, 2003 6 1:15 p.m. 6 7 Before: 7 8 HON. ALVIN K. HELLERSTEIN, 8 9 District Judge 9 10 10 11 11 12 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 2 352ksepa 1 THE COURT: I am sorry that I caused you to wait, but 2 this morning's calendar did not end when I was ready to end. 3 We are up to the motion by the airport operator defendants, 4 Massachusetts Port Authority, Metropolitan Washington Airport 5 Authority, City of Portland, Maine, Port Authority of New York 6 and New Jersey. Mr. Wood and Mr. Dumbroff will be arguing for 7 the defendants and Mr. Moller will be arguing for the 8 plaintiffs. Mr. Wood. 9 MR. WOOD: Thank you, your Honor, and I will be the 10 only person arguing for the airport operators. May it please 11 this honorable court and counsel, I am Mark Wood. I am 12 presenting the argument in support of the motions, your Honor, 13 that have been brought by the airport operators of all the 14 airports involved in this litigation. Your Honor has ordered 15 that some issues raised by Portland, those concerning lack of 16 notice, be handled as a Rule 56 motion at another time, but my 17 remarks this afternoon will deal with matters which also apply 18 to Portland, but not any of those matters. 19 In addition, Newark has raised certain matters in its 20 papers. Plaintiffs did not separately respond to those, and 21 unless your Honor had some questions, I will leave those points 22 simply to the arguments set out in Newark's brief. 23 I come here, your Honor, to ask you to do a very hard 24 thing in the circumstances of this tragic case. The airport 25 operators ask the court to dismiss the plaintiffs' claims SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 3 352ksepa 1 against them in their entirety, and there are two pivotal 2 issues, we believe, presented by these motions. First, federal 3 law, which plaintiffs assume for the purposes of this motion 4 controls this issue, makes it clear that the airport operators 5 have no duty with respect to passenger screening issues. 6 Second, the plaintiffs have failed to state any 7 claims, your Honor, based on a breach of the duties that are 8 assigned to the airport operators by federal law. It is 9 altogether appropriate for the court to decide at this stage 10 the nature of the specific duties that the airports owe to the 11 plaintiffs. This is purely a legal issue and the court may 12 decide these issues on the face of the federal regulations as 13 to any duty for passenger screening activities. 14 I would like to begin, your Honor, with a very brief 15 sketch of federal law and regulations which govern and provide 16 the legal standards for evaluating the claims against the 17 airports, and if I might, your Honor, use an exhibit here, I 18 think it would expedite my argument. I have provided a copy to 19 counsel. 20 THE COURT: I wonder if the public are interested and 21 able to follow this. I will try to repeat it in such a way to 22 make it understandable. 23 MR. WOOD: Thank you, your Honor. I would like to 24 begin, at the top of this exhibit we have the Federal Aviation 25 Administration, and as relevant to these matters the federal SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 4 352ksepa 1 security manager insures the development of a comprehensive 2 security plan that establishes a responsibility of each air 3 carrier and airport operator with respect to security. So we 4 start with that, and the derivation of that -- we set it forth 5 in our briefs, your Honor -- is federal law and the regulations 6 which have been promulgated pursuant to the Federal Aviation 7 Act. There are two parts -- it was alluded to yesterday and I 8 am sure that counsel will get into it, part 107 which applies 9 to airports, and part 108 that applies to airlines. 10 The Federal Aviation Act requires the FAA to oversee 11 both airports and airlines, and, specifically, at each of these 12 four airports that I am speaking on behalf of, there is a 13 requirement for the airports where the flights took off from -- 14 that's Newark, Dulles and Logan -- that a resident federal 15 security manager be there. He is of course an employee of the 16 FAA. The FAA security manager has a duty to insure that each 17 of those airports, your Honor, has a comprehensive security 18 plan. That plan establishes the responsibilities of each air 19 carrier that uses that airport and the responsibilities of the 20 airport operator. 21 Where do those responsibilities come from to put this 22 plan together for, for example, Logan Airport? They come from 23 part 108 of the federal air regulations for the airlines and 24 from part 107 of the federal air regulations for the airport. 25 The plaintiffs don't disagree with the concept that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5 352ksepa 1 both the airport and the airlines have security 2 responsibilities at these airports, and the focus of my 3 argument is that what your Honor needs to do is to carefully 4 parse out the responsibilities of the airport under the FAA 5 from the responsibilities of the airlines under the FAA. 6 I would like to turn to part 108 -- that's on the 7 right side of the exhibit, your Honor, and these in general, 8 and I will spin through them quickly for the benefit of those 9 who can't see them, the airlines' responsibilities are to adopt 10 and carry out an airport security program. The airlines are 11 responsible for ticketing and they are responsible for 12 screening passengers and their carry-on baggage, and that 13 involves providing training and testing the individuals who do 14 that function, and the use of very specific detectors that are 15 set out in the federal regulations. They are also responsible 16 under 108 for the control and handling of baggage and cargo. 17 The federal air regulations are extremely explicit with respect 18 to who has this responsibility, and the responsibility for this 19 comes from Congress. Screening must take place before boarding 20 and be carried out by a weapons detecting facility with 21 procedures operated by an employee or agent of an air carrier. 22 That is what the statute says. 23 The regulations as interpreted, and we've got the 24 Federal Register cites, federal law assigns solely to aircraft 25 operators the responsibility for passenger screening. That law SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 6 352ksepa 1 cannot be overcome by regulation. 2 THE COURT: The aircraft operators are the airlines. 3 MR. WOOD: Yes, your Honor. The words aircraft 4 operators or air carriers are used throughout by the FAA 5 regulators. 6 The airport operators -- Logan, Newark, Dulles -- are 7 not responsible for screening, and searching the literature, 8 and I am sure counsel will correct me, you can't find anywhere 9 where there is any contrary statement. 10 The federal government and federal employees then 11 oversee and regulate these airlines in carrying out their 12 passenger screening duties. So they have the duties. It is 13 very specific under part 108. It is a very well thought out, 14 incredibly detailed program, right down to federal regulations 15 on how one is to go about checking the criminal background of 16 passenger screeners. Your Honor, as part of our compendium we 17 pulled these various regulations and federal laws together for 18 your Honor, and they are of course set out in our brief. 19 There is no room, your Honor, to argue that these 20 duties are shared, that these passenger screening duties are 21 somehow shared by the operators of those airports. In 1998, in 22 a major study which I believe was referred to yesterday, the 23 FAA specifically considered, should we change the system, 24 should we assign these passengers screening duties to the 25 airports, and they determined and decided to leave them solely SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 7 352ksepa 1 in the hands of the airlines. That again is cited in our 2 brief. It is done by statute, and therefore it can't be 3 changed by regulation, by contract, by informal agreements, by 4 meetings. It is the responsibility of the airlines. 5 If we turn to the master complaints -- I want to 6 conclude, unlike your Honor's morning calendar at a time you 7 want me to conclude. If we turn to those complaints, you will 8 see that there is no claim stated, if the airlines are solely 9 responsible for the screening, there is no claim stated for 10 many of the allegations that are made in the complaints, for 11 example, that the airports jointly were required to develop and 12 implement and own and operate and manage and supervise and 13 staff and equip the airline security system, including 14 passenger screening, security checkpoint, preboarding, 15 passenger and luggage inspections. There is no claim stated 16 because the federal law provides that all of those activities 17 are solely in the hands of the airlines. There is no claim 18 stated when the master complaints allege that the airports 19 collectively with the airlines selected, hired, trained, 20 instructed the screeners, the metal detector and x-ray machine 21 operators and others. 22 So there are a whole number of these allegations which 23 we are asking your Honor to rule as a matter of law fail to 24 state a claim against the airports. 25 THE COURT: Mr. Wood, you had a small chart in which SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 8 352ksepa 1 you expressed the negative effect, airport operators are not 2 responsible for screening. Is that what it actually says? 3 MR. WOOD: In that Federal Register section where 4 there is a discussion of duties, that's what it says. 5 I want to point out something, your Honor. This 6 comment, because of your Honor's comment yesterday, was made 7 after 9/11. So this latter comment was not made before 9/11. 8 But if I recall correctly, it was in the context of going 9 through this process of qualifying employees, and as a general 10 discussion of who would qualify these screeners or employees 11 the statement was made, airports are not responsible for 12 passenger screening. If you look in our brief, your Honor, 13 there are a whole number of statements where we have pulled 14 together these points that there simply over the years is a 15 constant repetition that the airlines are responsible for this 16 function. 17 THE COURT: Does that necessarily mean that the 18 airport operators are not also responsible? 19 MR. WOOD: There is one intersection, your Honor, and 20 that is law enforcement. The airport operators are charged 21 with a responsibility not under part 108 but under part 107. 22 They have the responsibility of providing law enforcement. So, 23 for example, if you are going through that screening and the 24 screener is assaulted by a passenger or if the screener finds a 25 bomb, the employee of the airline does not deal with the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 9 352ksepa 1 passenger or does not deal with that situation. They call the 2 police officer over, who makes the arrest. 3 The FAA has made it very clear that the law 4 enforcement function is not to supervise, not to control, not 5 to be involved with the screening operation. They are to 6 respond to the screening operation when you have that kind of 7 situation. 8 For example, there was a specific discussion as to 9 whether or not those policemen should be stationed right there 10 at the screening station, and the FAA decided that they would 11 have a flexible response. A policeman could be controlling the 12 terminal but they had to be in a position where they could be 13 called over if they needed to make an arrest. 14 There is also a comment in the plaintiffs' brief that 15 there is a duty on the part of the airport operators, my 16 clients now, to keep records of security incidents, and I 17 wanted to clarify that for your Honor. What they do is keep 18 records of law enforcement activity. So if the officer made an 19 arrest, if the officer discovered a bomb or any security 20 incident, it is the Massachusetts State Police, for example, at 21 Logan Airport that is responsible for making that report. 22 So in summary, we ask your Honor to rule that the 23 airport operators had no duty with respect to the security 24 screening of passengers and baggage on September 11, 2001, and 25 to rule that any claim presented on that duty is untenable as a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 10 352ksepa 1 matter of law. 2 THE COURT: Is it clear that the access to the 3 airplanes by the terrorists and the weapons they used all came 4 through the airline screening procedures? Or is it too early 5 in the case to know just how they came improperly into the 6 aircrafts? 7 MR. WOOD: Your Honor, that is exactly where I was 8 going to turn, and the answer to that is, the only specific 9 allegations in these complaints are that ticketed, ticketed 10 terrorists passed through the security checkpoints, for 11 example, the master complaint for flight 11, carrying deadly 12 and dangerous weapons. There are other master complaints where 13 the allegation is also made, or obtained weapons. So the 14 allegation has those other words, but the crux of this case 15 from beginning to end and everything that was argued to you 16 yesterday both by counsel for the aviation defendants, by 17 Mr. Moller and by others all are premised on the only specific 18 thing that they put out in these complaints, and that is that 19 these ticketed terrorists passed through these security points 20 carrying dangerous weapons on the airlines. 21 THE COURT: But nobody knows that -- 22 MR. WOOD: All the witnesses are all dead, that is 23 correct. 24 THE COURT: We don't have full knowledge how they 25 boarded -- they used box cutters -- whether they were in the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 11 352ksepa 1 pockets, whether they were in seats because some confederates 2 who were maintenance employees left them there. We don't know. 3 Everything you say may be true. Your legal proposition may all 4 be accurate. But if we were to find out or it were to be open 5 to inference that something happened in breach of an airport 6 security, we would be left with a question of which defendant, 7 which category of defendant might be liable. That's a problem 8 at this point in the case. 9 MR. WOOD: Sure, and I want to help your Honor with 10 that problem, if I could. If you look on the left side of that 11 chart, the airport's responsibilities under this comprehensive 12 security law, they are also to adopt a security program that is 13 tailored to that airport. They are to protect against 14 unauthorized access to operations areas by fencing that 15 airport, by having doors that you can't walk through, by 16 issuing badges to everybody so that if you are unescorted in 17 that airport you have a proper badge on, and there is quite a 18 process to get a badge, and to provide law enforcement. This 19 is exactly what your Honor is homing in on. What if somebody 20 went over the fence and walked onto the airplane and put a 21 weapon in the back of the seat? Or what if somebody had a 22 badge? 23 THE COURT: Bought a badge on the street on the Lower 24 East Side. 25 MR. WOOD: The master complaints before your Honor do SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 12 352ksepa 1 not set forth any facts or allegations other than in the most 2 conclusory way that state a claim for any of those activities. 3 THE COURT: But the procedural law allows plaintiffs 4 to do that. They don't have to be specific. 5 MR. WOOD: They don't have to be specific but they 6 have to state a claim for a violation of one or another of 7 these duties. Your Honor, I have combed those complaints till 8 my eyes are falling out, and there is only one specific 9 allegation in those complaints, and that is that they walked 10 through that screening facility with their tickets onto those 11 airplanes. There is no allegation in the complaint anywhere, 12 your Honor, that they boarded through operation areas, that 13 they boarded through secure areas, that they had badges that 14 were improperly issued. 15 It's been 19 months since this tragic event. There 16 has been an enormous amount written about these incidents which 17 your Honor can take judicial notice of. And yet there is 18 nothing in any of these complaints that enables my client to 19 know what it is to defend itself against, and that is the point 20 of the Rule 12(b)(6) motion, that there is no claim stated as 21 to all of these duties, which we concede. We certainly had the 22 duty to have the fence and badge properly done, the door 23 secured and so forth. If there is an allegation in one of 24 these complaints that the terrorists, or an allegation in the 25 alternative that the terrorists obtained access to the airplane SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 13 352ksepa 1 or their confederates did by having a badge that was improperly 2 issued by Newark or Dulles or somewhere else, I wouldn't be 3 standing here making this argument. 4 THE COURT: Paragraph 42 of the flight 77 liability 5 complaint alleges as follows: Prior to September 11, 2001, the 6 defendants knew or should have known about documented and 7 reported numerous security breaches involving unauthorized 8 breaches and warnings that security was a risk and that 9 passengers -- it's a mixing together of different elements. 10 MR. WOOD: Yes, your Honor. 11 THE COURT: You may be right and plaintiffs may amend 12 and we will be back where we are. 13 MR. WOOD: On the amendment, your Honor, obviously 14 whatever your Honor decides. 15 Let me go quickly and make one point. This is a very 16 unusual situation that you have in front of yourself. There 17 were complaints that were filed and many of those complaints 18 were amended, and then all those complaints were collected 19 together in the master complaints and some of the master 20 complaints have been amended. So this isn't an ordinary 21 12(b)(6) argument where nobody has had a second or third 22 chance, and it is not an ordinary 12(b)(6) situation where you 23 haven't had an unbelievable amount of examination of that 24 tragic day. 25 So whether they can do any better than they have done, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 14 352ksepa 1 I don't know whether in your Honor's discretion you think the 2 airports ought to be dismissed at this stage until somebody is 3 able to come up and state a claim under these other duties. 4 That is obviously something that we will abide your decision. 5 But I would want to point that out. 6 THE COURT: You know, part of my job is to determine 7 if the allegations don't allege a claim for relief sufficient 8 in law, and you are pointing out to me arguments of 9 sufficiency, failure clearly to delineate that which is the 10 responsibility of the airport companies and that which is the 11 responsibility of the airline companies. 12 I am reacting because we don't want to have an 13 extraordinary amount of time spent fixing the pleadings when 14 the discovery itself is going to be the way this is going to be 15 fixed up. You are entitled to know on behalf of your client 16 what is alleged against you and I have to be sensitive to that. 17 On the other hand, I don't want to dismiss and have something 18 come back fixed up. 19 MR. WOOD: Sure. Your Honor, I think if you look at 20 this, passenger screening should be out of this case as to the 21 airports, because they are clearly -- there is no duty. 22 THE COURT: You are saying that the airport security 23 is different from the airline security, that the regulations 24 and the law make them different, and the complaints insofar as 25 they blur them put an unreasonable obligation on the defense, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 15 352ksepa 1 on the part of your clients and on the part of the airlines, 2 and I think that is an important point that Mr. Moller has to 3 address. Whether it is a matter for a with prejudice kind of 4 dismissal, that is a different issue. 5 MR. WOOD: I know it is, your Honor, and I guess there 6 will be one last point and then I will sit down and allow 7 Mr. Moller to hold forth. 8 When you look at discovery in this case, it strikes me 9 that it is like precedent that has made the point that the 10 discovery rules are designed to support a properly pleaded 11 cause of action, not to discover whether there is some cause of 12 action, and we certainly believe that we are in the latter 13 situation at the moment. 14 Thank you very much, your Honor. 15 THE COURT: Mr. Moller. 16 MR. MOLLER: Good afternoon, your Honor. 17 THE COURT: Good afternoon. 18 MR. MOLLER: Let me focus on the pleadings question 19 first, because to be candid, we did the best we could with 20 pleadings with very limited information on two grounds. Ground 21 number one is that we have never been able to examine the 22 airport security program or the airline security program to see 23 precisely how the various responsibilities are delineated, and 24 the extent to which there is overlap. 25 I would be very surprised if the FAA's concern with SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 16 352ksepa 1 airport and airline security were not drawn and were not 2 expressed in the security programs in such a way to give both 3 the airport and the airline the broadest possible 4 responsibility on the airport and on the aircraft. Your Honor 5 knows that we are now trying to work out the discovery of 6 responsibility documents and other related documents with the 7 Federal Aviation Administration, with the transportation 8 authorities, and until we see the reports we really can't 9 delineate intelligently anything other than reciting what 10 Mr. Wood has properly summarized in terms of the global 11 headings of responsibility. 12 THE COURT: Can you turn to paragraph 46 of the master 13 complaint. 14 MR. MOLLER: Master complaint 47? 15 THE COURT: 175. Yes, 21NC97. Paragraph 46 reads as 16 follows: On or prior to September 11, 2001, the airline 17 defendants, security company defendants, Portland and Mass 18 Port, through their agents, servants, officers, employees, 19 designees and/or contractors, jointly and severally undertook 20 and were required to develop, implement, own, etc. and oversee 21 the airline and airport security system at Portland Jetport and 22 Logan Airport. 23 What you are doing is alleging joint responsibility 24 between the airport companies and the airline companies. That 25 is precisely Mr. Wood's point, and his argument is that since SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 17 352ksepa 1 there is a careful delineation in the Code of Federal 2 Regulations and in the statute, shouldn't you have to plead in 3 a different way? 4 MR. MOLLER: If I could delineate it more carefully, I 5 would probably quote 107.3 of the regulations, which says no 6 airport operator may operate an airport subject to this part 7 unless it adopts and carries out a security program that, one, 8 provides for the safety and of persons and property traveling 9 in air transportation and intrastate air transportation against 10 acts of criminal violence and aircraft piracy. 11 I believe there is a mirror to that in 108 for 12 airlines. So conflating them I am not sure would do much more 13 than reciting this broad responsibility. At this stage, to be 14 candid, we could particularize it more and deflate it rather 15 than conflate it, but I don't know that substantively it would 16 advance the case a whole lot. 17 At this point in time, as I view the issue, it is, if 18 the airline defendants -- airport operator defendants violated 19 their duties of care, if that is shown, are they responsible 20 and may they be held liable. 21 THE COURT: Let's suppose that there were negligent 22 screening of passengers coming toward the aircraft and that the 23 terrorists were allowed to walk on with box cutters in their 24 pockets and that was what caused them to be able to hijack the 25 airplanes. Should the airport operators be liable? In other SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 18 352ksepa 1 words, if the facts show it is entirely a problem of airline 2 screening and the deleguees of airline screening. 3 MR. MOLLER: The answer to your question is yes, if 4 the proof is that it was entirely the fault of an airline. 5 Then the airport operator may be out if this regulation and the 6 plan so state. If the responsibilities are so clearly 7 separated that there is no overlap -- 8 THE COURT: Your point is that you can't know what the 9 responsibilities really were until you have discovery of the 10 airport managers. 11 MR. MOLLER: That is number one. Number two -- 12 THE COURT: Let me stop you a moment. Mr. Wood, is 13 that a fair point, until you have the discovery of the airport 14 managers, you really can't know what the responsibilities were? 15 MR. WOOD: Not as to passenger screening, your Honor, 16 because Congress passed a statute, and you could not 17 conceivably legally have a security plan that would change the 18 statutory obligation of the airlines to conduct the passenger 19 screening, any more than you could have a federal air 20 regulation that did that or anything else. So the answer to 21 that is no. 22 This motion was filed and then your Honor asked 23 counsel if they needed any discovery after we filed these 24 motions. They said no. I think the reason for that is, at 25 least on our motion, which is a matter of law on passenger SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 19 352ksepa 1 screening, there isn't anything that discovery could 2 conceivably show you that would change this duty decision. 3 THE COURT: Let's suppose the choice of the screeners 4 was a joint activity for the airport and the airline. 5 MR. WOOD: Under the law it cannot be. Under section 6 108, I could cite it to you, your Honor, it cannot be. It's 7 illegal, is what I am saying. 8 THE COURT: You may be right, but it may have been 9 done that way and it may have some type of restrictive effect. 10 We don't know. 11 I think you are making good points, Mr. Wood, but I 12 need to be cautious at this time because we don't know how the 13 facts will develop. Maybe at this time I should thank you for 14 the education that you have provided to me and to be alert to 15 the points that arise but to deny your motion without prejudice 16 to renew it. 17 MR. WOOD: Your Honor, if you would grant our motion 18 as to the passenger screening, certify for an interlocutory 19 appeal -- 20 THE COURT: I am not going to do that at this point, 21 but I may do it later. 22 Your clients, if they deserve to get out of the case, 23 should not have to wait and be involved in all the extensive 24 discovery that will go on. So you have to legitimately, 25 clarify your legal exposure at a relatively early time. I am SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 20 352ksepa 1 alert to that. You are alert to it. But I do feel that at 2 this time it is premature for me to rule. 3 MR. WOOD: It may be premature on the duties that we 4 actually have, but on the face of these statutes and 5 regulations, your Honor, you could help a great deal with the 6 management of this case by giving us a ruling on the legal 7 duty, because we either have that legal duty or we don't, 8 and -- 9 THE COURT: I hesitate to do it because I don't think 10 I have enough of a record built up at this particular point. 11 But we may not be far away. 12 Mr. Moller, do you have any more to tell me? 13 MR. MOLLER: The answer is yes, I wanted to touch on a 14 point that I left unanswered yesterday. But I will cooperate 15 and my committee will cooperate fully to try and resolve this 16 issue and develop a discovery modus to try to get to that 17 question. I know from other cases that there are meetings 18 among all members of all occupants and tenants of airports. 19 THE COURT: That doesn't seem to be too persuasive 20 because everyone needs to know what everyone else is doing. 21 MR. MOLLER: You are right, but it will help us find 22 out enough to respond promptly to these concerns. We don't 23 want to spend any more money as plaintiffs on needless 24 discovery and getting the issues clarified is in our interests 25 as well as their interest. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 21 352ksepa 1 MR. WOOD: Maybe like Newark yesterday, we can agree 2 on something that will be expeditious in terms of pointing out 3 if there is anything about the activities of these airports 4 which would be inconsistent with federal statutory law and if 5 not, quickly come back, because this case, as you know, will 6 involve a massive amount of discovery. 7 THE COURT: I wouldn't phrase the issue as you did, 8 but I take your point. I will deny this motion without 9 prejudice to renew it. 10 MR. MOLLER: May I fill in the gap that I 11 inadvertently left in an argument to you yesterday on the issue 12 of public policy, which obviously concerns you and concerned 13 us. It will take me one minute to go through it. 14 THE COURT: And probably another minute to get 15 somebody else's response, but go ahead. 16 MR. MOLLER: And I have taken the time to try to 17 formulate these brief remarks as much as possible. 18 You said yesterday that the Air Transportation Safety 19 and Systems Stabilization Act was irrelevant to the duty 20 analysis because the statute was enacted after 9/11. I believe 21 the conclusion is wrong and I blame myself really for not 22 clarifying it adequately to overcome your concerns. 23 The statute is not irrelevant for several reasons, and 24 let me show you why. 25 THE COURT: You made the point yesterday. You made SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 22 352ksepa 1 the point that the limitation of aggregate liability under the 2 act answered some of the policy concerns expressed by the New 3 York Court of Appeals, so that by limiting aggregate liability 4 you are affecting the prospect of unreasonably large exposures. 5 MR. MOLLER: I said that, but what I failed to say was 6 that the ATSSA federalized the issue of duty, because it 7 substituted Congress's understanding of how the duty issue as 8 it relates to paying had to be resolved. We are no longer 9 dealing with a New York analysis, we are dealing with a 10 congressional analysis, and the reason there is a very 11 significant difference is that under -- we are in this court 12 before Judge Hellerstein because a statute put us here, and 13 that statute said not only that we have to be here, but accept 14 the rules for the duty analysis, and that duty analysis is not 15 do we have a negligence -- that is conceded -- it is not do we 16 have causation -- that's conceded -- it's not do we have 17 harm -- that's conceded. So the only issue left in the duty 18 analysis is who has to pay, do they have to pay, and how much. 19 The how much part has been answered by the federal statute 20 which governs the resolution of the only open duty question, 21 which is should there or should there not be unlimited 22 liability. 23 THE COURT: You don't mean when Congress said the 24 airlines would be liable. 25 MR. MOLLER: No. That is a question of fact. The law SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 23 352ksepa 1 of duty analysis, should there be unlimited liability, has been 2 answered. Under New York law as of September 11 liability was 3 unlimited. Here we are after September 21 and everybody 4 knows -- 5 THE COURT: You made the argument yesterday. 6 MR. MOLLER: Then I didn't leave it out, but I wanted 7 to be sure that I left it with you in the right context. 8 MR. PODESTER: Roger Podester in support of the motion 9 to dismiss. This is a sequel, if you will, to yesterday's 10 argument. First let me respond that under New York law there 11 is not a requirement of infinite liability. There is just a 12 potentially large liability to indeterminate class -- 13 THE COURT: I understand that. 14 MR. PODESTER: The precedential value is also 15 important. Under the federal statute point, I think what 16 Congress said was, we are going to decide these cases under New 17 York law, except to the extent inconsistent with or preempted 18 by federal law. But because we don't know how it is going to 19 come out we are going to put a liability cap on the airlines 20 and the other defendants and create a compensation fund for the 21 personal injury claimants to give them a choice. But there is 22 no linkage in the statute that suggests that the liability cap 23 in 408(b)1 is meant to alter the substantive law that is set 24 forth in 408(b)2. It would be no more appropriate to find a 25 duty based on the liability cap than to find an absence of the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 24 352ksepa 1 duty to personal injury or wrongful death claimants because of 2 the Victims Compensation Fund. It is just an entirely separate 3 issue. 4 Thank you, your Honor. 5 THE COURT: Let's now proceed with the ground 6 defendants' motion to dismiss as to flight 11 and flight 175, 7 the Port Authority and the World Trade Center properties. 8 Richard Williamson will argue for the defendants and Brian 9 Alexander for the plaintiffs. Mr. Williamson, how are you? 10 MR. WILLIAMSON: Fine, thank you, your Honor. May I 11 proceed? 12 THE COURT: Please. 13 MR. WILLIAMSON: Good afternoon, your Honor. As has 14 been acknowledged in the past, particularly in the Mulligan 15 oral argument, the ground defendants, our clients, were victims 16 of 9/11, just as the plaintiffs suing them in the actions 17 before you today are victims. The clients suffered as much as 18 anyone. Yet we have here today plaintiffs who are blaming the 19 victims. We have the victims suing the victims. The victims 20 are indeed suing the terrorists in other cases, but in these 21 cases the victims seek to sue the victims, and that shouldn't 22 be. Indeed, applying the applicable law will show that it is 23 not permitted to be as a matter of law. 24 Let me first begin with the analysis of the existence 25 and scope of duty. Your Honor asked yesterday, can there be a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 25 352ksepa 1 rule, is there a rule with predictive qualities to answer that 2 question and apply to these cases and be consistent with all 3 the case law on this claim. We submit that there is and the 4 rule should be, and we offer it for your consideration, that a 5 building owner operator is not liable if the act that caused 6 the injuries initiated outside the building premises and the 7 owner operator had neither the duty nor the ability to prevent 8 the act. That rule applies in this case. 9 Let us test it against the factors that the Court of 10 Appeals in New York State has set forth for your Honor's 11 consideration in fixing the scope in determining the existence 12 of duty. 13 THE COURT: Let's talk first about what are the claims 14 against your clients. First there is an allegation that your 15 client failed to develop an adequately safe evacuation program; 16 second was a failure to insure that the building could 17 withstand a crash and resulting fire; third, an allegation that 18 there was an unreasonable danger that was created because of 19 negligent design, construction and the way the building was 20 maintained in terms of sprinkler systems, building materials, 21 evacuation routes and so on; fourth, there was an instruction 22 that was alleged to be misplaced to occupants that they should 23 remain in the building. 24 All those are argued one way or another in standard 25 negligence lawsuits. They all follow from the event, they SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 26 352ksepa 1 don't precede the event. I don't think we are talking now 2 about whether or not there was negligence in admitting the 3 terrorists onto the aircraft or hijacking the aircraft. We are 4 talking about acts and omissions of your clients after the 5 event, except for the design. 6 MR. WILLIAMSON: All those items would have been 7 irrelevant and are irrelevant to this analysis because none of 8 them caused a single death or injury. It is the terrorist 9 attacks that caused those. 10 I was going to begin with the duty analysis and then 11 move to proximate cause in the elements of ordinary superseding 12 cause and extraordinary superseding cause to show your Honor 13 when it is analyzed in that sequence, in each instance as a 14 matter of law, even assuming arguendo that there was negligence 15 in the ways that with 20/20 hindsight plaintiffs do indeed 16 claim, the complaint in this case should be dismissed as a 17 matter of law. 18 If we look at the reasonable expectations of the 19 parties in society which have been discussed, I submit, your 20 Honor, that the rule that I have just articulated would satisfy 21 those expectations. Before 9/11, the operative day on which 22 this must be judged, there was no reasonable expectation of the 23 parties, of society, indeed of our entire country, that the 24 ground defendants would be obliged to, legally obligated to 25 counter, prevent such terrorist attacks. They were SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 27 352ksepa 1 unprecedented in the history of our country. They were an 2 unprecedented assault on our society. 3 We turn to the likelihood of unlimited uninsured 4 liability. We discussed that yesterday. If your Honor were to 5 find, and this overlaps with the next two points, that the 6 ground defendants could be liable in a situation like this 7 where but for terrorists seizing the aircraft and deliberately 8 flying them into the Twin Towers, causing as much death as 9 possible, that nevertheless the ground defendants could be 10 liable, we need to examine the consequences for commercial real 11 estate in this country, for our economy, for our society. 12 Public policies affecting expansion or limitation of 13 new channels of liability would lead our country in a 14 circumstance where no owner or operator of a building could go 15 forward from this day without fearing that very expansion of 16 liability, making it untenable to continue to own and operate 17 real estate. 18 Your Honor mentioned all five of those considerations 19 of public policy factors which the Court of Appeals alluded to 20 in Hampton and of course promulgated in Pulka. There is a 21 sixth one which is enunciated in Polka, and that is the burden 22 required to discharge that duty. Were your Honor to impose 23 that duty today on the ground defendants and on owners and 24 operators of buildings in this country, what burden would that 25 be? How about for future buildings? Would the burden be that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 28 352ksepa 1 anybody that still wanted to build a building more than, say, 2 two stories high in this country, had an obligation to build an 3 impregnable fortress? What about existing buildings throughout 4 the country, not just New York City? 5 THE COURT: The Port Authority has been talking about 6 the design of the World Trade Center to withstand collision by 7 an airplane. Forgetting now whether it was accidental or 8 intentional, doesn't that suggest that the risk of collision 9 was foreseeable? 10 MR. WILLIAMSON: I think not, your Honor. I think the 11 analysis also changes over the continuum of time. If we look 12 back to the very late sixties and early seventies when the 13 World Trade Center and other buildings were constructed, there 14 was indeed an effort on the part of the structural engineers to 15 determine whether an accidental aircraft crashing into the 16 buildings could cause damage and would they withstand it. That 17 was the late 1960's and early 1970's. If you were to say 18 today, today in the early 2000's is it reasonably foreseeable 19 that an aircraft would crash into the World Trade Center towers 20 if they still existed, I would say the answer is no, not in 21 light of the radar and technology that has developed, not in 22 today's world. In any event, that is not what happened. We 23 didn't have an accidental airplane crash into a little bit or 24 part of a Twin Tower. We had two aircraft, as your Honor well 25 knows, crashing in deliberately at maximum speed, banking on SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 29 352ksepa 1 one of them as it went in, to cause the most possible damage, 2 death and destruction, and sadly it succeeded, and then the 3 other plane as well. That's what happened here. 4 THE COURT: Is it the magnitude of the death and 5 destruction that is the distinction? 6 MR. WILLIAMSON: It's the intentional conduct by 7 terrorists causing that death and destruction. 8 THE COURT: Something like that could be a supervening 9 act. 10 MR. WILLIAMSON: Precisely. I was about to come to 11 that. 12 THE COURT: In the classic proximate causation 13 analysis. But that is not necessarily an issue of duty. 14 MR. WILLIAMSON: That is precisely right, what you 15 just said, and I can move to that. 16 THE COURT: What happened here is a disaster of a 17 proportion that was beyond magnitude that could reasonably be 18 expected, which is the point you make. 19 MR. WILLIAMSON: Yes. 20 THE COURT: But the aspects of risk, if you analyze 21 them and break them into components, probably would have been 22 within the realm of duty and foreseeability if those analytical 23 portion were revealed. For example, an evacuation plan, an 24 accidental impact of collision by an airplane. Those aspects 25 were known risks that the building was designed to deal with. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 30 352ksepa 1 The evacuation plans were designed to deal with them. It's the 2 magnitude and the surprising nature of the shock that changes 3 things, according to your argument. 4 MR. WILLIAMSON: Yes, and also the intentional aspect 5 of it. And then if you try to judge it with 20/20 hindsight, 6 could you have done a little of this and a little of that, it 7 could have been done with better evacuation, even though it was 8 the most successful evacuation in the history of the world, 9 that is not the test. The test is whether it was reasonably 10 foreseeable to the ground defendants whose buildings were just 11 sitting there, whose people died on 9/11 just as plaintiffs' 12 representatives died on 9/11, that this would happen. 13 THE COURT: Don't you have a duty to the occupants of 14 the building even from unforeseen events to have a good 15 evacuation plan? 16 MR. WILLIAMSON: I think the answer is yes, and let's 17 test it. Suppose a fire began in a wastepaper basket in one of 18 the World Trade Center buildings. Of course the owner and 19 operator has an obligation to deal with that. Suppose the fire 20 began and evacuation was necessary. Same answer. And in the 21 tests that are articulated to your Honor and indeed the case 22 law supports this analysis completely, without exception. 23 Suppose the owner operator, assuming arguendo, negligently 24 permitted an intruder to enter the premises and that intruder 25 then caused damage. Is it possible that the court could find, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 31 352ksepa 1 assuming that all the other elements of a successful negligence 2 claim were made out, that the owner operator could be liable. 3 Yes, but that didn't happen. These buildings were just sitting 4 there. 5 THE COURT: But if it did happen there would be 6 liability for negligence by the people who were trapped -- if 7 that's the case, are we talking about something other than 8 duty? Are we talking about intervening events that break the 9 chain of causation? Are we talking about negligence rather 10 than duty? 11 MR. WILLIAMSON: Let me come to that and try to 12 satisfy your Honor's questions on the existence of duty, 13 because I am ready to turn to superseding cause. If we look at 14 the cases of Rivera and Nitz, for example, they provide very 15 helpful guidance, I think, on this analysis. What happens in 16 Rivera? The plaintiff gets injured, scalding hot water in the 17 bathtub. The court says the scalding hot water in the bathtub 18 was just sitting there. So even assuming arguendo that the 19 defendant was negligent in letting the scalding hot water drip 20 in, the hot water was not the cause of the infant's injuries, 21 it was the infant getting up, I think with a boot or something, 22 and getting on the side and falling in. 23 Let's look at Nitz. Similar analysis. Plaintiff gets 24 cut on a machine. What caused the injury? Was it the getting 25 cut on the machine? No, said the court. No. It was that the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 32 352ksepa 1 two brothers got into a fight, and in the course of fighting 2 with each other and pushing and hitting each other, one of them 3 got thrust against it and got cut. The court found the 4 manufacturer of the machine would not be liable. The court 5 found the owner of the premises where the bathroom was would 6 not be liable. Same exact analysis. 7 Plaintiffs who died on 9/11 -- except for those dead 8 on impact -- because they lost their lives in the fire, their 9 deaths were not caused by the fires in the legal analysis. The 10 analysis of duty shows that the deaths were caused by the 11 terrorist attacks on the buildings in which those people 12 happened to be present. That, we submit, is the analysis of 13 duty in this situation. 14 THE COURT: Is that duty or proximate cause? 15 MR. WILLIAMSON: I think it is duty and segues into 16 proximate cause. 17 THE COURT: It is my duty to declare that proximate 18 cause is largely a jury question. 19 MR. WILLIAMSON: I think in the case of proximate 20 cause, your Honor, the cases which we have cited on that issue 21 show that in cases where there aren't disputed issues of fact, 22 and here there aren't, they are singly appropriate for 23 determination by the court, and we cite Sheehan and Rivera, 24 where the cause of the accident is undisputed. It goes on to 25 say it is for the court, where only one conclusion may be drawn SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 33 352ksepa 1 from the established facts. Then the New York Court of Appeals 2 itself in Derdarian analyzes that. That sets forth in this 3 factual context where we all know what happened on that day, 4 because we were seeing it on TV and some of us experiencing it 5 on the ground, there is no disputed issue of fact as to the 6 fact that but for the terrorists seizing those airplanes and 7 deliberately crashing into the World Trade Center towers 17 8 minutes apart, none of us would be standing here or sitting 9 here today. We wouldn't be here, and this tragedy that befell 10 our country would not be leaving us with all this litigation. 11 Let me turn if I may to the analysis of superseding 12 cause which was touched on briefly yesterday. As your Honor 13 knows, there are two types of superseding cause. There is 14 ordinary and extraordinary. Your Honor, this was referenced 15 yesterday, your Honor referred to this in your Graybill 16 decision where you discussed the fact that superseding 17 intervening events, that is, events occurring after the 18 original tort, assuming the alleged negligence of the Port 19 Authority in the instances that solely contributed to the 20 complained of harm that canceled out the liability of the 21 original tortfeasor, in your Honor's words, consistent, of 22 course, with the decisions of the Court of Appeals in 23 Derdarian, Rivera, Nitz, what the plaintiffs are complaining of 24 with respect to the Port Authority must have caused the 25 occurrence of the accident from which the injuries flow. Nitz, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 34 352ksepa 1 same analysis, Sheehan, and on and on. 2 If we turn then to extraordinary -- because if either 3 one is present the motion must be granted and the complaints 4 must be dismissed. If we turn to extraordinary superseding 5 cause, here we are confronted with unprecedented attacks on our 6 society and our country. If these aren't acts so extraordinary 7 that responsibility for injury may not reasonably be attributed 8 to the ground defendants, who had nothing whatsoever to do with 9 these acts occurring, then we submit there can be nothing that 10 could be an extraordinary superseding cause. 11 Your Honor asked yesterday about suicide and you also 12 asked about Shea Stadium, and we gave that some further 13 thought. We go back to your Honor's hypothetical of Shea 14 Stadium. We submit that the owner operator of Shea Stadium, 15 akin to the ground defendants in this analysis, would not be 16 responsible if an airplane crashed into it, whether that 17 airplane crashed into Shea Stadium with 250,000 people in it 18 because it was pilot error or because a terrorist seized the 19 airplane and deliberately flew it into Shea Stadium -- 20 THE COURT: The analytical difference was whether or 21 not the act of terrorism was an intervening and supervening 22 event of such a magnitude as to cancel out the original 23 negligence of the airline pilot. It may be so clear as to 24 warrant a summary judgment. If it isn't, it's a jury question. 25 The problem with the World Trade Center is that it SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 35 352ksepa 1 unfortunately already had been submitted to terrorism in 1993, 2 and it had design claims and it did in various designs of the 3 building contemplate various acts of terrorism. How should I 4 deal with that? Doesn't that suggest a duty? 5 MR. WILLIAMSON: I think not, your Honor. In that 6 instance the World Trade Center made an effort post-1993, did 7 the very best it could to limit -- 8 THE COURT: Doesn't that suggest a duty? 9 MR. WILLIAMSON: Not in this circumstance. 10 THE COURT: It changes because the magnitude was 11 different and the nature of the terrorist act was different. 12 MR. WILLIAMSON: Absolutely. In every instance where 13 we are evaluating an intervening or superseding cause we must 14 examine the nature of the event. The law provides for ordinary 15 and extraordinary superseding causes, which by definition 16 recognizes that the magnitude and nature of the intervening 17 event has to be analyzed. 18 With respect to whether it is a jury question, no, 19 your Honor, we submit not. Specifically at pages 32 and 33 of 20 our reply brief we have all the cases that indicate -- in the 21 Court of Appeals speaking, the cases where, and I quote, the 22 question of legal cause may be decided as a matter of law 23 generally evolved into independent intervening acts, close 24 quote, and we cite numerous cases where the courts say that is 25 exactly what should happen. It does not become a question of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 36 352ksepa 1 summary judgment, it is a matter of law where there is no issue 2 as to what caused these injuries and it is in the analysis of 3 Nitz, Rivera and on and on, the terrorist attacks. But for 4 those in the quintessential analysis of causation, we wouldn't 5 be here today. 6 THE COURT: But for is not the only test of proximate 7 cause. 8 MR. WILLIAMSON: Not the only. I have tried to 9 satisfy each and every test. 10 THE COURT: Substantial causation is also a test. 11 I think I understand your point. To be candid about 12 it, it's a difficult point. The magnitude of the injury, the 13 nature of the injury would differ and probably it was 14 unexpected, it was clearly unexpected. 15 MR. WILLIAMSON: Absolutely. 16 THE COURT: The question is whether the procedures 17 within the building and maybe the design of the building, but I 18 think most reasonably the procedures in the building were 19 negligent. They may not have been. You may have done all that 20 you were reasonably required to do. As you point out, the fact 21 that so many got out and there was such order in the way they 22 got out by and large, that in itself is a very good argument 23 for reasonable conduct. 24 MR. WILLIAMSON: It was amazing. 25 THE COURT: But as I pointed out yesterday, we are not SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 37 352ksepa 1 dealing with whether or not there was negligence. We are 2 assuming there was negligence. We are asking ourselves was 3 there a duty, and I have to deal with the issue of whether the 4 nature of the particular attack on the building was such as to 5 cancel out the duty that I think your client assumed and owed 6 to its tenants to have proper evacuation methods, proper fire 7 retardant methods and so on. Without prejudging the issue of 8 whether or not there was negligence, whether or not the 9 intervening cause was of such a type as to cancel out the 10 original negligence, I don't know that I can as a matter of law 11 pass judgment on that issue. I have to grapple with the 12 issues. 13 I take your point, and your point about precedential 14 value with regard to real estate owners throughout the United 15 States is a very important point. 16 MR. WILLIAMSON: What would happen to this country if 17 the net of liability were cast so wide now that, as I said 18 early -- and it is not just rhetoric, it's the truth. Victims 19 are suing victims. Who wants to own real estate? 20 THE COURT: In the area era of atomic energy, the 21 government passed a law that recognized that problem and 22 federalized it by making provisions for liability when there 23 were some hazardous explosions with regard to atomic energy. 24 Perhaps the same thing has to be done here. 25 I think I understand your point. We have other SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 38 352ksepa 1 points. I think I would like to hear the plaintiff on this 2 point and we will come back to the particular claims. 3 MR. ALEXANDER: Thank you, your Honor. Brian 4 Alexander, Kreindler & Kreindler, for plaintiffs. 5 Your Honor, the claims here that plaintiffs make are 6 predicated singly almost on well-settled and long-recognized 7 duties that a building owner and/or a landlord has to design 8 and construct and maintain a safe building. That's as simple 9 as it gets. What we mean is the duty to safeguard occupants 10 from the risk of a catastrophic high-rise building, designing a 11 firesafe building and putting in safe, fireproofing, marking 12 the -- protecting egress routes out of the building. 13 THE COURT: What about design? 14 MR. ALEXANDER: Design is very significant. 15 THE COURT: When was the building built? 16 MR. ALEXANDER: '65 to -- 17 MR. WILLIAMSON: Late 1960's, early 1970's. 18 THE COURT: How would you expect the building to be 19 designed against possible collision by two massive jets, 767's? 20 The plane wasn't even invented. I am not even sure the 747 was 21 in existence at the time. 22 MR. ALEXANDER: The 707 was the airliner of the day at 23 the time. Believe it or not, there is not a whole lot of 24 different in the size or the amount of fuel that they handle. 25 The point here, and the reason I got this out, there SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 39 352ksepa 1 was a healthy public debate in the late sixties about just this 2 scenario, unforeseen event, could it withstand the impact. The 3 response from these defendants was, let's do a study. They did 4 that study and publicly declared when that was over that the 5 buildings could withstand a jet airliner striking it at 600 6 miles per hour. At the same time they should have foreseen the 7 subsequent events of a fire that resulted from the crash. 8 The thing that troubles me the most when we talk about 9 the design of a building is, how are we going to feel 6, 12 10 months from now when they comes out with a report that had the 11 design been adequate -- which we know for a fact it was not. 12 But if they determine had it been sufficient, had it had 13 enough, the buildings would not have collapsed, then guess 14 what, your Honor, there wouldn't be as many victims because 15 they would have had an opportunity to escape, they would have 16 had an opportunity to be assisted. The Port Authority would 17 not be a victim either because the buildings would still be 18 standing. Then you have the situation classically described in 19 Derdarian, two separate causes coming together to cause the 20 harm. 21 On the point of the magnitude, your Honor, I find this 22 fascinating. These defendants admit in their brief, page 20, 23 if the duty is there, which I will come back to, because they 24 are a landlord, they admit where an act of negligence results 25 in extraordinary or even unforeseeable injuries, as was clearly SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 40 352ksepa 1 the case here, the negligent actor is liable despite the 2 unusual and unexpected consequences and injuries resulting from 3 that negligence. 4 The duty, your Honor, here they can't deny. Nowhere 5 do they even try to. They don't say that they provided the 6 fireproofing that was adequate. To the contrary, they admit, 7 your Honor, that like any landlord they had a duty to create 8 and operate buildings that can withstand the normal stresses 9 and risks of fire. 10 It is critically important to clarify what the 11 plaintiffs allege and what we don't. Defendants' motion in 12 each of his arguments, as he reiterated to you today, fail 13 because they attack a nonexistent allegation. We do not allege 14 that they had to stop the terrorists from striking the 15 buildings. Nor do we allege that the buildings had to be 16 impregnable fortresses. In their transparent attempt to be 17 relieved of duty, each of the arguments end at impact. That 18 chronological distinction is key. Defendants focus exclusively 19 on duties to prevent and counter against the actual preimpact 20 terror act, rather than addressing the post-attack fire 21 responsibilities. This case is about what happened to those 22 occupants who survived the impact, people denied the ability to 23 escape because of this defendant's negligence, people who were 24 awaiting rescue and were unable to get out. Those people were 25 owed a certain measure of fire protection and opportunity to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 41 352ksepa 1 escape, and therein lies this defendant's liability in this 2 case. Plaintiffs are definitely entitled to go forward to 3 discover whether or not they met that duty. 4 Your Honor is definitely right, we have a heavy 5 burden. We acknowledge it. There is no getting around the 6 fact that these were big planes, it was a big building, and 7 because of that there were a massive number of victims. 8 When you look at Hampton, one of the things that case 9 establishes is a different standard. I think I heard Mr. 10 Podester say yesterday in distinguishing Palsgraf, a 11 recognition of the special relationships and duties. These 12 defendants were in the absolute best position to protect the 13 plaintiffs and we allege it must be taken as true that had they 14 done what is reasonably required in this case, the buildings 15 would not have fallen down, or, alternatively, the buildings 16 would have remained up for quite a bit longer, allowing the 17 folks to get out. This case is about people who died because 18 they couldn't get out, because these defendants used a 19 negligent building design and maintenance, which allowed the 20 fire to spread more rapidly, did not adequately protect the 21 steel structure, all of which -- 22 THE COURT: Under what circumstances should a judge 23 make the rule that an intervening event was so extraordinary 24 and so unexpected as to cancel out the original -- 25 MR. ALEXANDER: In this case, your Honor, in order for SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 42 352ksepa 1 you to decide that is an intensely factual question. 2 THE COURT: You don't know of any circumstances -- 3 MR. ALEXANDER: I actually do not believe in a case of 4 this nature -- and I didn't finish on the duty aspect and it is 5 critical. A landlord under New York law has a duty to foresee 6 fire under all circumstances. That's the Owens case, decided 7 over 60 years ago. Regardless of the origin of the fire, the 8 defendant landowner has to take reasonable fire safety 9 precautions so that the occupants are protected, to have an 10 opportunity to get out. 11 From our perspective, your Honor, there is no such 12 thing as a superseding fire doctrine. In every case where you 13 have a fire evacuation case, it means that somebody has 14 survived the fire. It may also mean that defendant met all the 15 reasonable safety precautions and nevertheless the building 16 collapsed and the person died by fire. 17 THE COURT: How does a 767 penetrate both the fire 18 walls and the evacuation routes and people above a certain 19 level are cut off? Is there an intervening event that cancels 20 out the duty of the World Trade Center? 21 MR. ALEXANDER: I would say to that, your Honor, and I 22 know that is where they are coming from, but we don't know that 23 happened in this case. That is a fact question. 24 THE COURT: So your argument is that at some point I 25 may have a ruling on duty but it is premature. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 43 352ksepa 1 MR. ALEXANDER: Absolutely. That may very well be. 2 The facts will dictate, perhaps at Rule 56, perhaps before a 3 jury, whether or not the circumstances of this crash, the 4 magnitude of this fire were such that no reasonable precaution 5 would allow questions of egress even to come into play. The 6 question is, is there a duty to the victims, to the occupants 7 in this case. Who else could possibly have the duty to make 8 sure there is safe egress, to make sure that it is designed in 9 a way to resist fire. 10 THE COURT: To provide reasonable egress perhaps is a 11 better way to put it. 12 MR. ALEXANDER: You are right, your Honor. Again, it 13 is the New York case law that holds that fire safety duties -- 14 THE COURT: Again, Mr. Alexander, there is a tension. 15 The rule of duty goes so far as to put the onus on the judge to 16 declare the issue, the method that the New York courts have 17 used and other courts have used to restrict liability in 18 unexpected situations. In so doing, the courts take those 19 issues away from the jury, which otherwise would rule on issues 20 of negligence and proximate cause. 21 I think I have to be cautious in this situation both 22 to pay attention to the policy of the rule but also not to be 23 hasty. That second aspect of cautiousness is a reflection of 24 the fact that I know so little, we all know so little. At the 25 same time, the duty is to protect the defendants from being SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 44 352ksepa 1 involved in expensive discovery. 2 Thank you, Mr. Alexander. Thank you for presenting 3 your point, and now we will go on to the second aspect of this 4 motion, which deals with the particular claims and whether or 5 not they came in too quickly or too slowly. 6 MR. WILLIAMSON: May I respond to a few of the points 7 that were raised? 8 THE COURT: If you feel I don't understand them, yes. 9 MR. WILLIAMSON: Wait a second. Let me look again at 10 my list. 11 MR. ALEXANDER: Your Honor, may I interrupt? My 12 understanding is that the plaintiffs are resting on their 13 briefs in all but the Friedlander case, which would be my case. 14 THE COURT: Raise that again. Friedlander, Salvo, 15 Circo and Simon. 16 MR. WILLIAMSON: Right. 17 THE COURT: Friedlander was a situation where 18 plaintiff filed a notice of claim on July 12, 2002, and the 19 lawsuit was filed on September 9, 2002, 59 days after the 20 notice of claim. The law establishing the Port Authority 21 provides that a plaintiff has to wait 60 days in order that the 22 governmental body should have a certain amount of time within 23 which to evaluate the claim and decide how to deal with it 24 outside of litigation. So how do we deal with this filed claim 25 that was filed on the 59th day rather than the 60th day? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 45 352ksepa 1 Also, we have to take note that the statutory time in 2 which to sue the Port Authority of one year was about to 3 expire, it would expire on September 11. It was a very narrow 4 window on which to file this claim. 5 Is there a doctrine of tolling? Can there be a 6 doctrine of tolling? Am I precluded from finding that the 7 filing of the action tolled the running of the limitation? 8 MR. WILLIAMSON: Yes, your Honor, I think so. First, 9 it is a question of subject matter jurisdiction. We submit 10 that you don't have subject matter jurisdiction over this case 11 because they didn't satisfy the statutory condition precedent, 12 and that is all discussed in both the moving and reply briefs. 13 Similarly, Circo and Simon asks you to indulge them. You also 14 have a request by Salvo where they ask you to sort of adjust 15 the calculations. You can't do any of those things. 16 THE COURT: Let's just do Friedlander. 17 MR. WILLIAMSON: OK. In Kind, the court found the 18 failure to wait the full 60 days, and I quote, results in the 19 withdrawal of the Port Authority's consent to suit and compels 20 dismissal of the action for lack of subject matter 21 jurisdiction, close quote. That's the end of the analysis. 22 This is not a matter of discretion. It's a strict statutory 23 provision that has to be complied with. They just didn't do 24 it. In their first brief they said we really did do 60 days 25 because they ignore New York general construction law. We SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 46 352ksepa 1 point out in our reply brief that doesn't work because section 2 20 shows you can't double-count the first and the last day, so 3 it's 59, not 60, and it is statutory. 4 So we think the answer is no, your Honor, as a matter 5 of law the complaint has to be dismissed. 6 I was going to ask you -- you said I would be able to 7 come back up but I didn't get to do governmental function yet. 8 We skipped over that. 9 THE COURT: You are right. 10 MR. WILLIAMSON: I wasn't really supposed to make any 11 rebuttal points because you knew what they would be, but that's 12 a dispositive motion point. 13 THE COURT: You are right, I apologize. 14 MR. WILLIAMSON: Should I do it now or wait? 15 THE COURT: Do it now. The question is is the Port 16 Authority entitled to governmental immunity. 17 MR. WILLIAMSON: Not immunity but to have the claims 18 dismissed on the grounds that it was performing its 19 governmental functions. There is one tiny exception which it 20 appears from the way the opposition brief is cast they are 21 really trying to squeeze into, which is the special 22 relationship task, and we show in our reply brief that that 23 effort fails. The special relationship test has four prongs, 24 and while they might be able to squeeze into the first two, 25 they clearly fail in the third and fourth. There is no SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 47 352ksepa 1 continuity between the government authority and none is 2 alleged. No. 4, the parties', plaintiffs', justifiable 3 reliance on the Port Authority's affirmative undertaking, in 4 the Court of Appeals' words, not alleged, don't exist. As a 5 matter of law these plaintiffs do not satisfy the special 6 relationship test and our analysis shows why they are trying, 7 and that is because the Port Authority is entitled to have 8 these complaints dismissed inasmuch as it was performing its 9 governmental function to the best of its ability. We can stand 10 here today with 20/20 hindsight and say if you had done this a 11 little differently done that a little differently maybe some 12 people would have gotten out, and the Port Authority cares as 13 much as anybody, got as many people out as it could, did the 14 best it could, and it would undeniably be better if more people 15 had gotten out. But the Port Authority performed its 16 governmental function to the very best of its ability with 17 incredible success, losing the lives of the courageous Port 18 Authority personnel who went back into the buildings to try to 19 save more lives. That is a governmental function. Performed 20 heroically, not perfectly because some people did die, a lot of 21 people died, but performed heroically in fulfillment of its 22 governmental function. It should not be a defendant here today 23 in these cases. This should not be happening. 24 THE COURT: Let's deal with the specific acts and 25 omissions that are involved, and here we have to turn to the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 48 352ksepa 1 allegations. Failure to develop an adequate and safe 2 evacuation plan. What is governmental about that? 3 MR. WILLIAMSON: Public safety and security. 4 THE COURT: Is it any different from any other 5 building? 6 MR. WILLIAMSON: The answer is no with respect to the 7 nature of the duty, but, as the Court of Appeals has recognized 8 in Wiener, where a government agency acts in providing general 9 safety and security to the patrons of governmental facilities, 10 it cannot be held liable for errors or omissions arising from 11 its activities in furtherance of that function even if a 12 private entity could be liable in parallel circumstances. 13 THE COURT: We have security for a subway station. We 14 begin with a plan for evacuation of a building. I don't see 15 how that is peculiarly governmental. 16 MR. WILLIAMSON: Because it relates to public safety 17 and security. What else can it be? It is not sending a tenant 18 a bill for rent escalation. That would clearly not be the 19 performance of a public function. 20 THE COURT: Just as much one way or the other. I 21 don't see the argument. You would have somebody stoking the 22 boiler functioning in a governmental way. You would have 23 someone who operates an elevator acting in a governmental way. 24 MR. WILLIAMSON: Look at Gassett. Maintenance and 25 operation of the Port Authority bus terminal, including but not SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 49 352ksepa 1 limited to, is a governmental function. 2 THE COURT: It has to do with security, so that 3 someone should not be throwing a heavy object -- 4 MR. WILLIAMSON: It is including the provision of 5 security, but it is the maintenance and operation of the Port 6 Authority Bus Terminal that the court there held was the 7 performance of a governmental function. 8 So I am simply applying the case law that exists that 9 is found. It is not just Port Authority but other governmental 10 agencies performing such functions relating to public safety 11 and security constitute a governmental function for which they 12 are not supposed to be sued. 13 THE COURT: I think I understand you. 14 MR. WILLIAMSON: Should I turn to Salvo? 15 THE COURT: Let me ask you one more question. 16 Recognizing that suing after the year violates the condition of 17 section 71, isn't there a distinction between that and suing 18 early? Suing early can be corrected. 19 MR. WILLIAMSON: I think not. I think there is a 20 strict statutory provision. I think it is a condition 21 precedent. The legislature didn't say you can file your notice 22 of claim and if you don't wait as long as you are supposed to 23 wait -- that is just not the case. 24 THE COURT: All right, Mr. Alexander. 25 MR. ALEXANDER: Thank you, your Honor. I don't think SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 50 352ksepa 1 I need to spend much time on the government immunity argument. 2 THE COURT: Then don't spend any time on it. 3 MR. ALEXANDER: Then I won't spend any time on it at 4 all. 5 The Friedlander case, our reaction was the same. 6 Although there is no case law that addresses the issue in terms 7 of filing early, we don't see anything in the strict 8 construction that prohibits -- 9 THE COURT: Except it's a safe statutory provision. 10 Section 2107, dealing with Port Authority, consent to be sued 11 on two conditions, namely, that the suit shall be commenced 12 within one year after the cause of action is approved and upon 13 the further condition that in the case of such suit a notice of 14 claim shall be served upon the Port Authority by or on behalf 15 of the plaintiffs at least 60 days before such suit, action or 16 proceeding is commenced. So it is the same statute but it is 17 distinguishable. The 60-day provision can be cured, the one 18 year can't. 19 MR. ALEXANDER: Correct, which is the dilemma faced 20 here, although there was a day. The comfort level is not too 21 tremendous. 22 THE COURT: Is there any case where other authority 23 has been helpful? 24 MR. ALEXANDER: I think there is, your Honor, a wholly 25 different approach and I think the Port Authority is aware of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 51 352ksepa 1 it. I think that 7108 allows for adjusting a timetable in 2 death I believe, which allows the court leave to extend time 3 set out in 7107 in a death case. In applying 7108 -- it's 4 called the Demarrea case versus Port Authority. Courts have 5 granted such waiver in recognition of the need to provide 6 reasonable time for a representative in a debt. Here, 7 Mrs. Friedlander was appointed June 3, 2002. She had until 8 April 4 to file a notice of claim. Until June -- let me give 9 them to you again. Friedlander was appointed on June 3 of 10 2002. That's the trigger for the one year, under our reading 11 of bare. They had until April 4 of 2003 to file a notice of 12 claim, which she has already filed, and until June 3 of this 13 year still to file a complaint. We think that those dates 14 incorporate the conditions precedent set out in the statute. 15 THE COURT: So you are saying that you can file right 16 now. 17 MR. ALEXANDER: I am saying that we can file right 18 now. 19 THE COURT: Mr. Williamson, do you agree that they can 20 file right now? 21 MR. WILLIAMSON: No, your Honor. If you look at the 22 case law -- 23 THE COURT: Where the claimant is a person under the 24 age of 18 years or is mentally or physically incapacitated and 25 by reason of such disability no notice of claim is filed or SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 52 352ksepa 1 proceeding commenced within the time specified in the statute, 2 or where a person entitled to make a claim dies and by reason 3 of his death no notice of claim is filed, suit or action or 4 proceeding commenced within the time limit, any court may in 5 its discretion grant leave to serve the notice of claim and to 6 commence the suit within a reasonable time but in any event 7 within three years after the cause of action accrued. So since 8 there has been a death, and given the fact of the 9 appointment -- to June 3, 2002, couldn't I in my discretion 10 grant leave to Mrs. Friedlander to serve now? 11 MR. WILLIAMSON: I think not, your Honor. Page 32 of 12 our brief we pointed out that such cases are premised on 13 incapacity of the plaintiff to act, which hasn't been shown or 14 alleged here. 15 Furthermore, at page 36 of our reply brief we note 16 that other plaintiffs have attempted this sort of thing, and in 17 a case involving the City of New York against the Port 18 Authority, First Department 2001, the Appellate Division First 19 Department held substantial compliance with statutory 20 prerequisites is not sufficient, and then in Egrant Properties 21 it was found that the unconsolidated laws do not permit the 22 court to overlook or correct defects in compliance with its 23 requirements. That's what is going on here. There has been no 24 motion seeking any of the relief we are hearing about today in 25 oral argument. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 53 352ksepa 1 Your Honor, and I addressed and discussed all of this 2 in the Mulligan oral argument, and indeed in your order 3 following that argument you fashioned a procedure for precisely 4 how to deal with any such applications, and that is not before 5 you today. We talk about Demarrea at page 32, premised on the 6 incapacity of the plaintiff to act. 7 THE COURT: Mr. Alexander. 8 MR. ALEXANDER: We would just rely on Demarrea for the 9 general proposition and in that case I should point out, your 10 Honor, that the Demarrea court borrowed the essential 11 calculation, the filing requirement can run from the 12 appointment of a representative of a decedent's estate. 13 So we think that a remedy available to your Honor is 14 to dismiss the complaint without prejudice such that we can 15 refile. 16 THE COURT: Thank you. 17 Do you want to argue Salvo? 18 MR. WILLIAMSON: Yes, your Honor, Circla and Simon. 19 THE COURT: Here the issue was the failure to give a 20 home address, and the question I put to you, if the plaintiff 21 had put down a post office address, why can't she put down the 22 lawyer's address as a place to receive mail? 23 MR. WILLIAMSON: I think there are four issues, four 24 defects, your Honor. You have alluded to the first one. With 25 respect to that, the statute is clear as to what the plaintiff SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 54 352ksepa 1 is supposed to do, but that's not the end of this one, and the 2 fact that there are other defects frankly needs to be addressed 3 as part of the overall analysis. We also have here a notice of 4 claim which talked about one group of claims and then in the 5 complaint personal claims by the plaintiff are attempted to be 6 added, even though they are not in the notice of claim. That's 7 a violation of the statute. 8 In addition, the notice of claim did not include the 9 names or mention the two other plaintiffs that have now been 10 added to the complaint. So, if you will, piggybacking 11 additional claims, additional plaintiffs onto the notice of 12 claim are also violations of the statute. 13 THE COURT: So we should strike the claims, the loss 14 of society, loss of affection, loss of companionship, grieve -- 15 MR. WILLIAMSON: At a minimum the personal claims have 16 to be stricken and the claims of the two individuals she added, 17 who I believe are children, have to be stricken. 18 Also, after we made this motion, we then have 19 something called a, quote, amended notice of claim, close 20 quote, which of course is an attempt to evade or circumvent the 21 statute, dated February 14, 2003, after this motion, after the 22 action was commenced and only after we made the motion they say 23 OK. So maybe it wasn't a statutorily adequate notice of claim, 24 let us file this amended notice of claim. 25 THE COURT: She gave her home address and listed SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 55 352ksepa 1 herself -- 2 MR. WILLIAMSON: Tried to fix all the deficiencies of 3 the original notice. 4 THE COURT: What is the next issue, Circo and Simon? 5 MR. ALEXANDER: I have been instructed to do so by to 6 rest on the briefs. 7 THE COURT: Circo and Simon. 8 MR. WILLIAMSON: Circo and Simon asserts three 9 negligence claims and one property damage -- withdrawn -- three 10 negligence claims and one breach of contract all seeking 11 property damage. It was the law firm that was the tenant in 12 one of the Towers. With respect to their three negligence 13 claims, they have all been dealt with in the points that we 14 have been discussing, the lack of a duty, the superseding 15 cause, both ordinary and extraordinary, and then the -- 16 THE COURT: Your argument is that there should not 17 have been a breach of lease and there should not have been a 18 negligent security claim because those are not included in the 19 notes. 20 MR. WILLIAMSON: Precisely. 21 THE COURT: Alleged negligent security you would say 22 is a governmental function. I think I understand. 23 MR. WILLIAMSON: Again, they added it later on. 24 THE COURT: Thanks. 25 (Recess) SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 56 352ksepa 1 THE COURT: I want to apologize for not being entirely 2 audible. One problem is that the microphone at the podium has 3 not been plugged in and we can't find the outlet and we can't 4 find the audio manager in the courthouse. So we are going to 5 try to be louder than we were, and if people can't hear, please 6 raise your hands and we will try to correct it. 7 This motion is by Fiduciary Trust and Franklin 8 Templeton's motion to dismiss in the case of Green-Wotton 9 against Fiduciary Trust. Mr. Leslie Fagan will speak for the 10 defendants, Miss Andrea Bierstein will speak for the 11 defendants. 12 MR. FAGAN: May it please the court, Leslie Fagan for 13 Fiduciary Trust and its parent Franklin Templeton. 14 As your Honor has noted, this case is different from 15 the ones you heard today and yesterday. This is an employee v. 16 employer case. There are two motions. One is our motion to 17 dismiss the first amended complaint, which has effectively been 18 conceded and we would request your Honor to so order that. The 19 next is a motion for leave to replead by the plaintiff and file 20 a second amended complaint. The legal issues are the same, and 21 the case presents two kinds of cause of action both of which we 22 think are barred. 23 Your Honor, the facts as alleged by plaintiff Patricia 24 Greene-Wotton are that her husband was at work at Fiduciary 25 Trust's office at the South Tower on 9/11. He was one of 87 of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 57 352ksepa 1 our employees who perished that day. He was a computer guy. 2 At his office in the South Tower after the North Tower was 3 attacked, he was asked to remain and perform disaster recovery 4 systems work on the company's computer. The claim is that our 5 conduct resulted in his death. 6 THE COURT: Excuse me. Mr. Blum, we have a problem 7 with the audio. 8 MR. FAGAN: Your Honor, the first claim I would like 9 to address is the negligence claims. This is brought on behalf 10 of the employee. This claim is barred under Workers' Comp. 11 There is a skirmish in the papers between whether New York law, 12 New York Workers Comp or California Workers Comp applies to the 13 9/11 situation. We don't think it is necessary really to 14 determine that because we think the law of both states is the 15 same. If an injury or death arises out of and in the course of 16 employment, then it is covered by Workers' Comp, and the 17 exclusivity provisions of Workers' Comp kick in. The claim has 18 to be resolved in the Workers Comp administrative process and 19 not in the courthouse. Here, on the face of the complaint, 20 Mr. Wotton was at work, he was at his offices, he had had 21 responsibility for computer disaster recovery, he was requested 22 by the employer for the employer's business's benefit to do 23 this work, and he did it. 24 Under the case law, that is enough. It is incident to 25 employment. We have cited with your Honor -- there have been a SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 58 352ksepa 1 lot of Cardozo cases cited in the last few days. 2 THE COURT: We all wish we had paid more attention in 3 law school. 4 MR. FAGAN: Absolutely. We cited the Greeve case. 5 This was a case where a cigar packer was asked after hours to 6 make a delivery of cigars to some customers. It was after 7 hours and it wasn't his job, strictly speaking, to make 8 deliveries. He fell, he was killed, and the court said that is 9 incident to employment and it is covered. It not only 10 presupposes deliveries would be covered but even after hours it 11 would be covered. The California statute itself speaks of 12 coverage for injuries suffered in the course of injuries 13 incident to employment. 14 The argument is that working on the disaster center 15 recovery system that day was not a part of the compensation 16 bargain between employer and employee. Why? It is alleged 17 that several weeks before 9/11 Mr. Wotton was given the job of 18 being in charge of the website at Fiduciary. He was the Web 19 Master. And, therefore, working on the computer system, which 20 he had done hitherto, was no longer part of his responsibility. 21 To ask him to do that was not part of the compensation part. 22 Your Honor, if that were the case it would viscerate 23 the exclusivity part of Workers' Comp. Every day workers in 24 the US do things that are not central to their job 25 responsibilities, and yet they are part of the job and they are SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 59 352ksepa 1 part of Workers Comp, as the Greeve court found. 2 Judge, there are many cases along this line that we 3 have cited. There is an amazing case in California, Ecchees v. 4 Sea World, where a secretary is asked to ride Shamu, a killer 5 whale, as a publicity stunt and gets hurt. That is incident to 6 Workers' Comp. It is an extreme case but it proves the point. 7 On 9/11, Mr. Wotton was performing as part of the employment 8 bargain. If on 9/10 he had been asked gee, would you help us 9 out with the computer disaster recovery system, there is no 10 doubt that he would have said yes because he too understood 11 that was part of the compensation bargain, and therefore on 12 9/11, on that horrible day it cannot be different, and 13 therefore we would think that the bar applies. 14 The second claim, your Honor, and I will be brief, it 15 is intentional infliction. This is brought not on behalf of 16 the employee, it is brought on behalf of the plaintiff herself. 17 Your Honor, these intentional infliction claims are very tough 18 tort claims to state. They require, of course, intention, and 19 the case law is replete with the definition of what the acts 20 have to be. They have to be atrocious and beyond civilized 21 society norms. The Second Circuit has said they have to be 22 heinous. If you look at some of the cases, your Honor, by way 23 of illustration, there is a power company case where a power 24 company shuts off the electricity to a customer and says we are 25 not turning it back on until you give us 500 bucks and you SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 60 352ksepa 1 obtain a legal separation from your spouse. That's atrocious. 2 The notorious Howard Stern radio case, where he plays with 3 remains of his former cohost on the air, that has been found to 4 be atrocious. Stalking cases have been found to be atrocious. 5 What do we have here? 6 The plaintiff says that Fiduciary issued a Cobra 7 notice saying that health insurance would after a certain point 8 in time be her financial responsibility, then withdrew the 9 Cobra notice and said it would pay itself. There is an 10 accusation that at some point someone unidentified in the 11 pleading from Fiduciary called up and said your husband is 12 accounted for, and alas it was not so. Lastly there is an 13 accusation that we have denied that he was asked to stay and 14 have engaged in this controversy. 15 These acts do not amount to the kind of atrocious, 16 uncivilized behavior that the case law demands, and the 17 illustrations I have given suggest. They just don't. They 18 don't come close. While there is a suggestion in plaintiff's 19 papers that the magnitude of 9/11 makes what might otherwise be 20 considered ordinary acts extraordinary, uncivilized, atrocious, 21 I think the reverse is true. In the chaos and confusion and 22 catastrophe of 9/11, acts which might in ordinary circumstances 23 be considered subject to criticism, acts on that day, I think 24 every inference that the court is allowed to draw would suggest 25 that these acts could not be deemed atrocious, uncivilized, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 61 352ksepa 1 heinous. These are the stuff of catastrophe. 2 Therefore, your Honor, we believe that the intentional 3 infliction claim is as barred as the negligence claim is by 4 Workers' Comp, albeit under case law, on the New York cases 5 that we have cited. 6 THE COURT: Thank you. Ms. Bierstein. 7 MS. BIERSTEIN: Good afternoon, your Honor. Andrea 8 Bierstein for the plaintiff Patricia Greene-Wotton. I guess I 9 want to say at the outset that Mr. Fagan and I disagree 10 primarily about the similarity of New York and California law 11 here, and I think Mr. Fagan is relying primarily on New York 12 cases, which we think are not the same as the current law in 13 California, and although I was a little envious that he got the 14 opportunity to cite the Shamu the Whale case just because it is 15 fun to say, the problem with that case is that it is much older 16 and predates the line of California cases that we cite in our 17 papers, and that is the Shoemaker, the Viconte case, City of 18 Moore Park case. In those cases, and these are all more recent 19 cases in California, after the Ecchees v. Sea World case, the 20 California court has carved out an exception. Mr. Fagan has 21 alluded to the exception of things that are outside the 22 compensation bargain. But I think in discussing the Ecchees 23 case he would give you the sense that that case was decided 24 under that structure, but I think that we have these more 25 recent cases that are looking at what that means in California, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 62 352ksepa 1 because I think in those cases the courts are dealing with 2 situations that are incident to employment but that are not the 3 kinds of claims that employees would expect. They are not the 4 kinds of treatment that they expect on the job, they are not 5 the kinds of risks that employees have undertaken in their 6 jobs, and there the California courts have said this may be 7 outside the compensation bargain. 8 THE COURT: I tell my law clerk to call Mr. Blum 9 because the audio is broken. That is not part of their job as 10 law clerk. She does that and becomes electrocuted because the 11 telephone is defective and suffers an injury. Are you saying 12 she is not subject to compensation? 13 MS. BIERSTEIN: That is part of our -- 14 THE COURT: How about getting caught? 15 MS. BIERSTEIN: I think that is often part of an 16 employee's job. 17 THE COURT: It wasn't part of Mr. Wotton's job to work 18 with computers in such a way to help the employer get necessary 19 jobs done? 20 MS. BIERSTEIN: It had been part of his job but I have 21 to say, it was not part of his job and not part of the risk 22 contemplated in the employment bargain for him to do that at 23 the World Trade Center because his employer had a policy in 24 place that said if you had to do disaster recovery on the data, 25 you went to New Jersey and there was a meeting place in New SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 63 352ksepa 1 Jersey and you did it there, and so taking on the risk that 2 there would be a terrorist attack on your building and in order 3 to secure your duty was outside the compensation because that 4 was a risk that he wasn't supposed to take. The fact that it 5 was also not his job on September 11 makes it all the worse 6 that he was asked to do this, but the fact that it wasn't 7 supposed to be done at all -- 8 THE COURT: It is very hard to follow that. There is 9 a general business in dealing with computers. He knew his way 10 around the computers, it was an emergency situation, there was 11 an evacuation going on, not because necessarily they expected 12 another terrorist attack but because it was a prudent thing to 13 do. It is hard to say that he was doing something that was not 14 part of his job. 15 MS. BIERSTEIN: I think the risk that he was exposed 16 to was not the risk of being a computer guy for his employer. 17 I don't think that is the type of injury that Workers' 18 Compensation is meant to address. 19 THE COURT: Tell me about the case Shoemaker against 20 Myers. It was a case of a whistle-blower, retaliation against 21 a whistle-blower. That doesn't seem to be anywhere close to 22 the job relationship that we have in the case before us. 23 MS. BIERSTEIN: Your Honor, that is true, and I think 24 none of the facts of the cases we rely on are close to this. 25 They are not even close to each other. There is a range of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 64 352ksepa 1 situations. You have the whistle-blower, you have the one 2 alleging dirty dealing. You have the sales clerk who is 3 accused of stealing from her employer. You have disability 4 discrimination. They don't fit a pattern and I would agree 5 that none of them match our facts. But I think that they 6 require the court to do a case-by-case analysis of whether the 7 employer has stepped out of his proper role, whether these are 8 the risks that the employee is taking on in performing his job. 9 THE COURT: Thank you. 10 MS. BIERSTEIN: I just wanted to say one quick word on 11 the intentional infliction of emotional distress argument, and 12 I guess just two points on that. First of all, under the law 13 in New York, either intentional or reckless disregard are 14 sufficient to make out that claim, so although we don't allege 15 that there was actual intent to distress, we do allege that it 16 was in reckless disregard of the probability of that. 17 Mr. Fagan is right, we rely on Ms. Wotton's situation after 18 September 11, that you have to judge the outrageous conduct in 19 that context. Although Mr. Fagan makes the pitch that things 20 that happened that day should be judged with more kindness and 21 generosity because it was a hard day for everyone, there is 22 some truth, but the things she alleges didn't happen on that 23 day but in the days and weeks that followed when she was a 24 woman with a two-year-old child, a newborn baby born eight days 25 after September 11. She had spent the week between the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 65 352ksepa 1 collapse of the towers and the birth of her child hoping that 2 her husband would be found. The baby was born with terrible 3 complications. The employer was aware of all this. So at a 4 time several weeks later when the employer had a chance to get 5 its bearings and catch its breath and figure out what it was 6 doing and my client did not, I think their conduct has to be 7 judged in that context, your Honor. 8 THE COURT: You know, the statement that your husband 9 may have been found alive, unless expressed with some purpose 10 to inflict injury, does not strike me as intentional infliction 11 of emotional distress. 12 MS. BIERSTEIN: I think in terms of recklessness -- 13 THE COURT: You would have to be on the low order of 14 civilization and to call up a spouse and say your spouse has 15 been found alive. 16 MS. BIERSTEIN: We allege that it was reckless, that 17 they didn't have good information, they didn't think about what 18 a woman in her situation nine months pregnant, what effect that 19 would have on her. 20 THE COURT: Negligence is not intentional infliction, 21 I don't think, nor the statement that I am going to cut off 22 your employment right to medical care and then not doing it. 23 MS. BIERSTEIN: They kept changing what they were 24 going to do. They kept saying it is going to get cut off and 25 it wouldn't. She had an infant in the hospital who required SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 66 352ksepa 1 massive medical treatment and she was getting notices from 2 Fiduciary saying we are about to cut off your health insurance, 3 no, we are not, yes, we are, and that to her seemed like a 4 reckless cruelty to a woman in her situation. 5 THE COURT: Thank you. 6 Decision is reserved except in I think three instances 7 where I made rulings. One had to do with the Virginia law of 8 intentional infliction of injury. I think I misstated that -- 9 what was it? 10 MR. ALEXANDER: Strict liability, your Honor? 11 THE COURT: Yes. 12 Dismissing that, it was on consent. The other two, 13 the three airlines that were not operators and the airport 14 operators, I thought the motions were premature and I denied 15 them without prejudice. All the other aspects of the motions 16 are subject to reserve. I will think about them and write on 17 the subject. 18 In order of priority, I intend to first turn my 19 attention to the action against the special master; second, to 20 deal with the motion to remand the respiratory injury cases to 21 the state court; and, third, to deal with the issues that we 22 discussed yesterday and today. 23 Mr. Barry, we have a conference in about two weeks. 24 MR. BARRY: Yes, sir, on the 16th. 25 THE COURT: I doubt that I will have this decision SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 67 352ksepa 1 ready by then. Should we postpone that? 2 MR. BARRY: I think that would be in order. 3 MR. MOLLER: It would seem to be prudent. 4 THE COURT: As we get close to the event and I see 5 where the progress is, why don't we get in touch with both of 6 you and work out an adjourn date. I have a trial coming on 7 which is going to occupy a good part of my time for the next 8 couple weeks. I am not sure what progress I will make on this 9 case. I will assign it third priority after the other two 10 motions. 11 We are adjourned. Thank you all for your attention. 12 (Proceedings adjourned) 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300