1 1 2B1USEPC 2 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF NEW YORK 3 ------------------------------x 3 4 IN RE SEPTEMBER 11 LITIGATION 4 5 21 MC 97 (AKH) 5 6 ------------------------------x 6 7 8 New York, N.Y. 8 November 1, 2002 9 10 11 Before: 11 12 HON. ALVIN K. HELLERSTEIN 12 13 District Judge 13 14 14 15 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 2 1 (Case called) 2 THE COURT: Once again I have distributed an agenda 3 and several attachments to that agenda. 4 And I hope in this meeting to discuss with you any 5 issues that anyone has in relation to this litigation, and if I 6 don't cover a particular point, there will be an opportunity to 7 bring up anything else. 8 I have pretty much identified the sequence of how I 9 want to proceed. Let's do that immediately. 10 As I understand, there is going to be a master 11 complaint that will subsume all issues filed by December 3; an 12 answer with counterclaims, crossclaims and the like will follow 13 30 days after that. It is proposed that the last date to add 14 third party defendants be served by December 3 as well. 15 How would that work, Mr. Moller? 16 MR. MOLLER: Your Honor, I think that our schedule 17 contemplates that, yes, the master complaint, we hope that we 18 can get it into one document, but it may be necessary because 19 of different theories that there will be more than one 20 complaint, assuming complaint or complaints, we envision that 21 the defendants would have until, frankly, March 3 to file an 22 answer or move, that the defendants would not answer, would be 23 compelled to answer within 30 days. 24 THE COURT: Give me that again. 25 MR. MOLLER: We will file -- SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 3 1 THE COURT: -- complaints or complaints by December 3. 2 MR. MOLLER: By December 3. 3 We would then also begin, under our proposal, 4 discovery which, to us, is very, very important, both for the 5 support of the underlying litigation and in order to be able to 6 defend the motions to dismiss that the defendants have 7 indicated that they are going to be making. So after the 8 master complaint is served, we begin our discovery. 9 The defendants have indicated that they want, 10 essentially, the time until March 3 or not later than March 3 11 to make a judgment as to whether they will simply answer or 12 make whatever motions to dismiss they deem appropriate. 13 THE COURT: And not have to make those motions by 14 that date? 15 MR. MOLLER: And make the motions by March 3, '03. 16 They would have, essentially, four months to develop their 17 positions with respect to the master complaint. And we would 18 use that same time frame to conduct initial discovery. 19 Then things follow in a fairly routine fashion, 20 opposition to the motion to dismiss or motions to dismiss, as 21 the case may be -- 22 THE COURT: Let me stop you there. 23 Why so long to file answers and motions? 24 MR. MOLLER: Frankly, we are responding there to the 25 defendants' request, and we are prepared to compromise on that. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 4 1 MR. BARRY: We reached that date in an attempt to 2 compromise. And bearing in mind that you are looking for one 3 brief on behalf of the defendants who might be taking a 4 particular position on a particular motion which we see as a 5 difficult task, certainly not insurmountable, but difficult 6 considering the amount of defendants involved who might want to 7 make a particular motion. That's why we picked that date in 8 March. We can move it up. 9 THE COURT: February 7. That is approximately 60 10 days. 11 Why is discovery needed by the plaintiffs before 12 answers? 13 MR. MOLLER: We anticipate that the answers are going 14 to be denials and, therefore, simply to postpone initiating 15 discovery for something that is certain to happen, for us, 16 seems to be wasting time, especially if there is a statute of 17 limitations and victim compensation fund deadline looming for 18 victims to make a decision or an election as to which way that 19 they are going to go. 20 So the sooner we are able to present the clients with 21 a fair assessment, as best we can, of the prospects in the 22 lawsuits, the better off and fairer we are going to be able to 23 give advice. 24 THE COURT: My interest is, first, to allow the 25 lawsuit to proceed but, also, to provide a speedy and efficient SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5 1 and inexpensive remedy to those defendants who should not be 2 here. That is one of the reasons that I want to move up the 3 February 7 date. If I allow early discovery, that may make 4 things difficult for these kinds of defendants. I am willing 5 to move the dates up even more for defendants to make motions 6 to dismiss. 7 MR. MOLLER: I would like the motions to dismiss for 8 the defendants to be sufficiently comprehensive so that, when 9 you rule, the course of the litigation and the issues are clear 10 and that the issues of fact to be resolved are outlined with 11 reasonable clarity. 12 Obviously, you have the gavel, and the scheduling -- I 13 just wanted to remind you that you have it. 14 THE COURT: My secretary just bought me that gavel. 15 MR. MOLLER: The plaintiffs' lawyers are under an 16 enormous amount of pressure from their clients to get 17 information and want to get information in order to accelerate 18 the progress of the litigation. I don't think that the motions 19 to dismiss are going to significantly enhance the defendants' 20 position. That's my view. 21 THE COURT: Let me try to learn whether there are any 22 defendants who, on the pleadings, believe that they can obtain 23 dismissals. 24 MR. BARRY: Let me speak to that in my capacity as 25 liaison counsel and without necessarily representing all of the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 6 1 views of all the defendants on this. But I do believe that 2 there are several defendants who believe strongly that they 3 have viable motions to dismiss on the pleadings depending on 4 exactly how those pleadings read. 5 We haven't seen the master complaints yet. Most of 6 the defendants believe strongly that there should be several 7 master complaints by category. But I know for a fact, for 8 example, that the non-carrier defendants, who I am calling 9 them, who happened to be sued arising out of the Newark 10 accident and in relation -- not the Newark, the take-off from 11 Newark and also from Logan Airport that did not carry the 12 passengers -- they certainly have a viable motion to dismiss. 13 THE COURT: The other airlines having to do with 14 security? 15 MR. BARRY: Security at the airport, correct. 16 To answer your question, I believe that there are 17 several defendants that have viable motions. 18 THE COURT: They would have to answer and base their 19 motions on Rule 12(c). Since their motions would depend on 20 matters that have to be alleged by them in their answers, it 21 seems to me that they will not be able to move against the 22 complaint, but they may be able to move once they answer. And 23 it may have discovery issues as well. 24 Frankly, I don't know how to proceed in a way that is 25 efficient. Mr. Moller has a point. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 7 1 MR. BARRY: Initially, and trying to negotiate a 2 schedule, your Honor, the defendants' position was that there 3 should be no discovery pending the filing of motions to dismiss 4 in the traditional sense. Even the airlines and security 5 companies that were directly involved and the aircrafts that 6 were hijacked feel strongly that they might have a motion based 7 merely on the pleadings. So our initial position was no 8 discovery. 9 In an attempt to compromise with the plaintiffs, we 10 came forward with the schedule you saw which basically requires 11 us not to provide responses to the discovery until the time 12 that we file the motions to dismiss or individual answers. And 13 we thought that not only would give us an opportunity to 14 evaluate our motion based upon the allegations in the complaint 15 or complaints, based also, if we feel necessary, on the 16 responses to contention interrogatories, if we believe they 17 were necessary, and we thought -- 18 THE COURT: My experience with contention 19 interrogatories is that they are largely a waste of time until 20 the end of the case. 21 MR. BARRY: That's been my experience as well, your 22 Honor, but this case is a little bit different because we are 23 not exactly sure what the allegations are going to be against 24 the various defendants represented here. 25 And it may be necessary, it may not be necessary, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 8 1 depending upon how the complaints are drafted. 2 Based upon the current complaints, as we have seen 3 them, the allegations are terribly vague. 4 THE COURT: Mr. Moller, I am not in favor of 5 contention interrogatories, but you don't have to do very much 6 to bring in a defendant in a case, especially a case like this. 7 It is your interest to move this case and not get delayed with 8 peripheral defendants. 9 MR. MOLLER: Right. 10 THE COURT: So can you give Mr. Barry some kind of 11 answer on this? 12 MR. MOLLER: I think that the master complaints, 13 properly phrased, are responsive to his contention request. 14 THE COURT: But experience will teach you that there 15 are lots that you don't know with regard to defendants who are 16 not immediately in the forefront, and many of them are named, 17 and you are going to want to depend on discovery to obtain 18 information that will substantiate your claim or might 19 substantiate your claim. 20 MR. MOLLER: If I understand what Mr. Barry is saying, 21 there are non-carrier defendants -- it is believed by some of 22 the litigants, some of the plaintiffs -- that participated in 23 the development of security procedures at airports, even if 24 they were not the carrier. And that there may be a joint and 25 several responsibility for security at airports. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 9 1 THE COURT: Will you know this before taking 2 discovery? 3 MR. MOLLER: I think we need some discovery to be able 4 to establish for those plaintiffs and for those causes of 5 actions the agreements and relationships with respect to 6 security. 7 THE COURT: Can you focus discovery with regard to 8 defendants who wish to move? 9 MR. MOLLER: We can try. Yeah, we can try to do that. 10 THE COURT: It is in the plaintiffs' interests to have 11 as many defendants as possible, given the damage limitations 12 that are involved in this case? 13 MR. MOLLER: That's right. 14 THE COURT: So that which the law gives you an 15 advantage, you are not going to surrender. And I have to 16 accommodate the procedures to allow that. 17 By the same token, I need to pay attention to allow 18 defendants who are not major defendants who feel that they have 19 a good faith basis to eliminate themselves to do so. 20 I think what I would like to do is to allow some 21 structured discovery following December 3 with regard to 22 peripheral defendants. And I'm going to leave that very loose. 23 This is provisional and suggestive because I'm not 24 sure that I have any great wisdom to suggest to you but, in the 25 interests of allowing people to make motions intelligently and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 10 1 for me to be able to rule on those motions in some intelligent 2 way, I would like to have discovery structured within a 3 60-day-period with regard -- 4 MR. MOLLER: Both ways? 5 THE COURT: Perhaps both ways, but I'm not sure that 6 you have much discovery to give. 7 MR. MOLLER: I don't mean to give; I mean that we 8 want. 9 THE COURT: That's what I am talking about. I want to 10 provide a procedure by which you will be able to take necessary 11 discovery with regard to the types of defendants who will want 12 to make a motion to get out of the case. And I would like to 13 have that done within a 60-day period if possible. 14 And then I would like to have a time restraint within 15 which these parties will have to move so that they can know 16 early in the game where they stand. And I think that if we do 17 this, we will make a decent amount of progress, not on all 18 fronts perhaps, but some fronts. And maybe you can start 19 taking additional discovery as well. 20 I don't know if this makes sense. 21 Yes, sir, Mr. Baumeister. 22 MR. BAUMEISTER: The peripheral defendants have not 23 been sued by many of the plaintiffs. The more important 24 motions, I would hate to delay. And I thought that the Court 25 just said, in the first 60 days, let's go forward against SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 11 1 peripheral defendants and maybe the rest. 2 I am here to make a plea, Judge, that it should go 3 forward on all fronts for the following reasons. 4 There is no doubt that the carriers will be making a 5 motion on foreseeability as far as the ground victims and, 6 ultimately, maybe even no breach of a duty owed. 7 Those elements necessary to thwart that motion are 8 contained within the following documents, the air carriers' 9 standard security program which talks about the types of 10 security things that you must do. That is a security-sensitive 11 document which we will be involved with the government to get. 12 That will take time. But that will say if it was a razor 13 blade, and it was not detected, is that a violation of the duty 14 by the carrier. It goes specifically to duty questions. 15 The knowledge issue, within the files and security 16 safety information of the government, within the warning files 17 of the carrier, what I am suggesting to the Court is, while the 18 peripheral defendants -- and I understand the Court's desire to 19 make this efficient -- the heart and soul of this case really 20 goes towards the primary carriers, American and United, the 21 breaches of their duties and the duties owed to the airline 22 passengers and/or to the people in the tower. 23 I suggest that today, if it were ordered that we get 24 the ACSSP, the knowledge documents out of the government, much 25 less the airline -- and Mr. Alter can speak to that -- that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 12 1 exercise alone would take us six months. And that is based on 2 my experience from the PanAm Lockerbie case. So I don't want a 3 delay on that. 4 THE COURT: Mr. Alter is going to tell me that he 5 wants to have some restriction on who may have access to this 6 information. He may have other restrictions as well. That is 7 going to be one of them and, therefore, he wishes to advance 8 the disposition dates with regard to parties who might be 9 eliminated from the case. 10 There are a lot of pulls on me, and I don't know that 11 I am going to satisfy everyone. It is likely that I am not. 12 MR. BARRY: Your Honor, it is just for these reasons 13 that are troubling the Court that I have suggested several 14 different master answers. 15 We have certain peripheral defendants so named who 16 believe they have a very strong motion. But if the plaintiffs 17 believe that they need some discovery, it should be directed 18 towards those particular defendants. 19 There are other defendants who believe that they have 20 very strong motions based on the allegations as yet unseen in 21 the pleadings. Those defendants believe it would be terribly 22 unfair to subject them to full blown discovery when they 23 believe they have strong motions to dismiss. 24 That is why we attempted to reach a compromise with 25 plaintiffs by extending the time for us to respond, allowing SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 13 1 the plaintiffs to serve their discovery requests. But until 2 such time as we have been able to assess the viability of our 3 motions, those defendants to do so, I think it is unfair to 4 subject us to full blown discovery, and that discovery is going 5 to trigger the SSI issue, no doubt. 6 THE COURT: Mr. Moller. 7 MR. MOLLER: Your Honor, the peripheral defendants 8 should not control the pace of the litigation. 9 THE COURT: I am already persuaded of that. 10 Defendants will answer on February 7, and those who 11 wish to file motions may. But I think motions could be 12 premature at that time, and I think what I need to do is to 13 have a conference with you again within a reasonably short 14 space of time after February 7 to discuss how we might go 15 forward on those wishing to make motions to dismiss. 16 Second, I think plaintiffs should be required, and I 17 think that they have already undertaken to do, to file their 18 discovery requests at around the same time as they file their 19 pleading in December. 20 Plaintiffs' pleading and the defendants' pleadings, I 21 leave to your discretion how comprehensive in terms of parties 22 you wish to make those pleadings. I don't want to make a rule 23 that everything has to be compressed into one if it makes sense 24 to have two or three or four. That is for the complaint and 25 that is for the answers. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 14 1 Now, Mr. Barry, what kinds of discovery information do 2 the defendants wish? Is it against one another or against the 3 plaintiffs? 4 MR. BARRY: Not at this time. 5 THE COURT: Against the plaintiffs? 6 MR. BARRY: I think certain defendants, primarily the 7 building defendants, may take that position or may have taken 8 it in the past. I am not sure exactly what their position is 9 now. Certainly, the airline defendants, the security 10 companies, I believe, are not interested in conducting any 11 discovery prior to filing motions to dismiss. 12 THE COURT: What is the status of third party actions 13 that are likely to result after February 7? 14 MR. BARRY: The status at the moment, your Honor, is 15 that they are in suspension. We have agreed not to assert 16 crossclaims or third party complaints at this stage, pending 17 the outcome of motions to dismiss. 18 THE COURT: You are going to be filing those soon? 19 MR. BARRY: We have not filed them, your Honor. We 20 will be happy to do so. Some of them -- I'm not sure if they 21 are all -- but we have provided for a date in the schedule 22 submitted to your Honor for the filing of crossclaims and third 23 party complaints far off into the future, December. 24 THE COURT: December 3, 2003? 25 MR. BARRY: Yes, your Honor. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 15 1 That date came as a result of our thought that the 2 issues raised by the motions to dismiss and the subsequent 3 interlocutory appeals that we believe both sides are in 4 agreement that will be necessary, that we thought we would 5 concentrate on these key issues in the case before getting into 6 crossclaims and third party complaints which may never be 7 necessary. 8 THE COURT: Subject to my later ruling that that date 9 is too far in the future, I will accept it. 10 The issue that I wish to address or have you concern 11 yourselves with is, if this third party adds people that are 12 not in this case already, there will be a lot of activity, that 13 some or all of them might wish to redo in some fashion which 14 would be prejudicial to those here and those not here. 15 MR. BARRY: I understand. 16 THE COURT: So that is something that you can think 17 about. 18 What we are coming to is a need to address in February 19 what kinds of discovery will we have. 20 I think Mr. Moller, Mr. Baumeister and colleagues 21 might think that that might be too far in the future. 22 MR. MOLLER: I didn't hear the last part of what you 23 said. 24 THE COURT: I'm asking if it is too far in the future 25 to wait until February 7 or immediately after that to discuss SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 16 1 structuring discovery. You would have stated your demands by 2 December 3. 3 MR. MOLLER: We will have stated our demands and, 4 frankly, if we serve our discovery demands with our complaint, 5 the defendants will be to say, for one reason or another, that 6 this is too burdensome, too premature. 7 We would like to get moving and, as a practical 8 matter, leaving aside scheduling and all of the other stuff, 9 the airlines are in the case. And sooner or later there is 10 going to be discovery -- 11 THE COURT: The question really is: To what degree 12 will your discovery not be SSI? Is there anything appreciable 13 that will not be SSI? 14 MR. MOLLER: We don't know because the process of 15 investigating SSI materials, from what we can see, is still up 16 in the air. 17 THE COURT: Supposing we have a conference, let's say, 18 January 9, the first Friday in January or the second, the 19 purpose of which would be to identify what the probable 20 responses to discovery might be? 21 MR. MOLLER: That is fine with us. 22 MR. BAUMEISTER: That's fine. 23 I think, your Honor, the SSI documents are at the 24 heart and soul of the case. And I think January 9, Mr. Alter 25 will come in and we can discuss how to handle it. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 17 1 THE COURT: January 9 is not good for me. I can do it 2 either January 3 or January 17. 3 MR. BARRY: The defendants have no objection to 4 January 17. 5 MR. MOLLER: January 17 will be a happy day for me, 6 but a terrible day for scheduling a court appearance. 7 THE COURT: Do you want January 3? 8 MR. BAUMEISTER: No. 9 THE COURT: Let's go off the record. 10 (Discussion off the record) 11 THE COURT: January 24. 12 MR. BAUMEISTER: Your Honor, just to jump ahead, in 13 Lockerbie, there will be disputes with Mr. Alter, no doubt. 14 The air security and other SSI documents became critical. 15 Ms. Martin who was in the courtroom today, was 16 instrumental in identifying those documents, and she is working 17 with Mr. Alter today. 18 Judge Platt, who was chief judge, when there was a 19 dispute, would look at each document and make an instantaneous 20 ruling. 21 And I would hope, at that conference, we would have 22 the government identifying what is truly privileged, that we 23 will have a procedure worked out. 24 THE COURT: Let's ask Mr. Alter. 25 MR. ALTER: Your Honor, unfortunately, based on what I SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 18 1 have just heard, I am going to stand here as a bit of an 2 obstructionist. 3 THE COURT: That's your job, isn't it? 4 MR. ALTER: That is my job. 5 That is not how the government foresees this 6 progressing. And the description, however it may have occurred 7 in prior lawsuits, does not pertain to what we have to address 8 in this one. 9 I am a bit surprised at how this conference has 10 unfolded, given the discussions that I had with counsel before, 11 because our conception was that the parties understood that 12 there would be, certainly, a narrow attempt to move against the 13 claims of the ground victims, as we discussed in our letter to 14 the Court. And no discussion was had as to the passenger 15 claims. And we set forth our concerns with regard to those. 16 What I am hearing now is a very different conception 17 of how this process should go forward. And what we endeavored 18 to do in our letter to the Court last evening and to the 19 parties is to explain the position of the TSA, insofar as it is 20 able to facilitate early resolution of the issues. 21 I am more than happy to wait until the 24th of January 22 to address the requests that have been propounded. 23 THE COURT: What is your picture of how to proceed? 24 MR. ALTER: My picture is set forth in the letter. As 25 we understood it, there is a narrow issue with regard to the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 19 1 ground victims that may well be dispositive. 2 And, again, I would leave it to counsel for defendants 3 to address this in greater death because I don't know the 4 nuances of the theory but, generally speaking, it may be 5 dispositive as to all of the ground victims' claims. That is 6 an enormous portion of this litigation -- 7 THE COURT: The argument would be what? 8 MR. ALTER: The argument, as we understand it, at some 9 point, there is -- if you want to call it a duty, if you want 10 to say that it relates to foreseeability in the concept of 11 proximate cause so that, by virtue of the lack of any material 12 and materials that the airlines and security companies had, 13 that the type of attacks upon ground victims was simply not 14 foreseeable and, therefore, the injuries and horrific damages 15 inflicted by those attacks, the liability for which would not 16 flow to those defendants. 17 That information was what we understood plaintiffs 18 counsel to be interested in, in responding to that type of 19 motion, as they argued -- and we thought, with some 20 persuasiveness -- in order to respond to that type of motion, 21 they would need to have some factual information as to what the 22 airlines and security companies knew from the government was 23 the risk assessment. 24 Because that is a very narrow issue and essentially 25 winnows out all of the other issues of SSI which are quite SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 20 1 sensitive and may be broad, we thought that we could facilitate 2 that motion by entertaining and working with the parties to get 3 at that information to allow them to make a motion on those 4 grounds. 5 THE COURT: My impression, when I read this, is that 6 it is not going to be so easy. The issues of duty and 7 foreseeability are among the most difficult issues in tort law. 8 Judge Cardozo, with his brilliant language in the 9 Polsraf case, made it all seem so easy and graspable. But law 10 school students have been wondering for years just how to apply 11 that rule to the ordinary kinds of events where something 12 unexpected results in damage to people. 13 On the one hand you might look at a pleading and say 14 that there is or is not duty. It is a question of reasonable 15 foreseeability. And reasonable foreseeability, almost by 16 definition, is not the same thing. It is much different than 17 the same thing than a fact-intensive inquiry; a fact-intensive 18 inquiry is the inquiry for proximate cause, not so much the 19 duty. 20 But as we all know, when you have a Court that asks 21 and determines what is the actor's duty on people who happen to 22 be injured, the question of duty and the question of proximate 23 cause become inextricably bound. They were that way in 24 Polsraf. They were that way in every proximate cause case. 25 I have been struggling with language appropriate for SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 21 1 instruction to the jury in a proximate cause case that I have 2 now, and there were as many formulations for probable cause as 3 there are judge that try to wrestle with the issue. 4 I don't have any degree of confidence that discovery 5 that may be appropriate can be limited in such a fashion as to 6 make it reasonable and appropriate, and it is going to quickly 7 run off into some other issue. 8 And when I come to decide that motion, I'll have the 9 same problem as I have now. And I potentially think that these 10 issues of foreseeability and duty will not be decided at the 11 beginning of the case, but decided at the end of the case or in 12 the middle of the case. 13 I don't know. This is my suspicion. And that is why 14 I am reluctant to hold up discovery while this goes on because 15 I do agree with Mr. Moller and Mr. Baumeister. They are here. 16 They are parties in this Court, and this Court and the rules 17 associated with it are required to be attentive. The parties 18 need to conduct discovery in the cases. 19 MR. ALTER: Your Honor, if I may, in response, I first 20 say that I am fortunate -- at least at this juncture, I am not 21 in a position to explicate on the legal ramifications of that 22 type of duty, motion or, really, to opine as to the usefulness 23 of discovery on that issue. 24 And as perhaps defense would like to address this at 25 some point, there are also purely legal theories that they have SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 22 1 which don't go to that kind of discovery -- 2 THE COURT: Mr. Barry or one of his colleagues can 3 sort of spell that out. 4 MR. BARRY: Without getting into the substance of the 5 argument, your Honor, I would say, No. 1, certain 6 representations that Mr. Alter made in his letter to you about 7 what the defendants and the plaintiffs agreed to insofar as 8 what claims would be moved against, I think, overstated a bit. 9 And I think Mr. Moller will support me on that. 10 There was no agreement among the defendants or the 11 plaintiffs at any meeting that we would only move against the 12 ground victims. So if he took that away from our meeting and 13 attempted to schedule something, he took away a misconception. 14 Certain defendants, as I have said to your Honor 15 before, believe they do have a strong motion on the law at this 16 stage of the proceedings, once again, without seeing the master 17 complaint. 18 So without going into what we believe are the detailed 19 merits of that argument, I definitely believe that the 20 defendants can file such a motion without getting into 21 Mr. Alter's bailiwick. 22 THE COURT: They don't need any discovery if they do 23 it on pleadings and that, perhaps, could be done by February 7. 24 MR. BARRY: That is our intention, your Honor, 25 absolutely. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 23 1 THE COURT: No reason why I shouldn't accommodate 2 that, and I propose to do that. 3 MR. BARRY: Thank you. 4 THE COURT: So anyone who wants to make the motion, 5 but I do think that it would be appropriate to meet with you 6 after the initial assessment of the plaintiffs' demands for 7 discovery so that I perhaps can anticipate some of the 8 objections and qualifications, and that needs to be addressed. 9 MR. BARRY: And we agree with that and welcome that. 10 THE COURT: I don't think that will hurt you at all. 11 MR. ALTER: Let me clarify. If there was any 12 ambiguity in our correspondence to the Court that suggested 13 that the views that the government expressed in terms of 14 separating out motions was a universal agreement between the 15 parties, I apologize for that. 16 What we state in our letter is the view of the TSA, 17 insofar as the government is able to facilitate discovery 18 upfront so that the motions may be meaningful and lead to a 19 quick resolution. 20 I don't want the misunderstanding that either 21 Mr. Barry or Mr. Moller agreed to specific procedure going 22 forward. 23 THE COURT: We can address that again on January 24. 24 We are going to meet at 1 o'clock that day. 25 I would like to hear something about the issues of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 24 1 what we call the ground victims, the unfortunate people who 2 were caught up in the World Trade Center, also, in terms of how 3 things might wind up with the defendants in that case. 4 Let me hear about the latter first. 5 There are a number of potential defendants, and 6 perhaps one ultimate defendant, and I wonder how that is going 7 to go. 8 MR. BARRY: I can report to your Honor, so far it is 9 going very slowly because the only people, I believe, that have 10 been served have been Port Authority and perhaps -- 11 MR. WILLIAMSON: Yes, that's correct. 12 In some cases the Port Authority of New York and New 13 Jersey and, in some cases, World Trade Center Properties or The 14 Silverstein Properties, Inc. 15 THE COURT: Maybe Mr. Williamson will address that. 16 How is that going to work out? Are there going to be 17 multiple counsel representing multiple defendants? 18 MR. WILLIAMSON: Yes, I think so. 19 You had scheduled a separate conference, your Honor, 20 if you recall, in a case with about eight captions in it, and 21 asked the premises defendants to perhaps form a committee or do 22 something to structure a defense in those cases, that it would 23 be easier to facilitate liaison with the Court and defense 24 counsel. 25 But as I said at that time, and I don't know that it SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 25 1 has changed, there were no other counsel present that day, and 2 we haven't heard from any of the other counsel for any of the 3 other premises defendants, if you will. 4 Mr. Moller had said at that time that they would be 5 serving our clients, the Port Authority and Silverstein 6 Properties, in some of those cases and, indeed, they have. But 7 we haven't heard from any other counsel for any other premises 8 defendants in any of those cases or that any of their clients 9 have been served. 10 So I think that it is going to take a little more time 11 to percolate, and then we can reach out to them and see if we 12 could perhaps structure a committee in line with your Honor's 13 suggestion. 14 THE COURT: Mr. Moller, what is your thinking in terms 15 of how the side issues will line up? 16 MR. MOLLER: My thinking is, working with the defense 17 liaison, who is in communication with the Port Authority and 18 the other defendants, that their committee will ultimately 19 break down -- if I remember the status report that we gave you, 20 the defendants said that they were in the position to refine 21 their approach at the time that we filed the status report, but 22 that will inevitably take place. The defendants, I can't 23 imagine, are going to have every lawyer and everything in every 24 piece of litigation -- 25 THE COURT: I think much is going to depend on how you SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 26 1 approach the case. There are passive and active defendant 2 motions which provide for indemnification and which will raise 3 the issue in terms of insurance limits that will apply to that 4 case, and it may be that we need to advance those issues 5 because they will probably have to be ruled upon. 6 MR. MOLLER: We plan to address those issue in the 7 master complaint by segregating out causes of action that 8 distinguish between an active and passive or vicariously liable 9 party. 10 THE COURT: So I am premature at this point? 11 MR. MOLLER: You are not premature. We are doing it, 12 but the fruition of our efforts has not arrived yet. 13 THE COURT: Are there any other pleadings related 14 issues that I should cover? 15 MR. MOLLER: There is a question. Mr. Barry reminds 16 me that service of process, we will accelerate. We will advise 17 all plaintiffs counsel to accelerate service of process and 18 that the time for parties to serve individual answers should be 19 set in the individual cases, as distinguished from the master 20 complaint, master answer. 21 And if your date for the master motion date is 22 February 7, I suggest that that date be the uniform date by 23 which the defendants have to respond to pleadings served upon 24 them in this lawsuit. 25 THE COURT: That means that all pleadings have to be SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 27 1 served well before January 7. 2 MR. MOLLER: To the extent that we can influence that, 3 we will see that it happens. If it is not February 7, it is 20 4 or 30 days as the case may be, from the time of service. 5 MR. BARRY: Yes. 6 THE COURT: I think that we have covered what I want 7 to cover with the pleadings. 8 MR. BARRY: Your Honor, excuse me. Just as a matter 9 of clarification, because I have had other defense counsel 10 raise this, and I believe you said this at our first 11 conference, that you still wanted individual answers to 12 individual complaints, notwithstanding that we were having 13 master complaints and master answers, is that correct? 14 THE COURT: I think I still stand by that. 15 MR. BARRY: Just clarification. 16 THE COURT: I think it is important to fix the 17 position of people in the case, the parties in the case. 18 MR. MOLLER: On the matter of pleadings, I can report 19 to the Court that we have obtained a representation from 20 Jeffrey Squitieri, plaintiff's counsel in the Antigua case, 02 21 Civ. 7185, in which the United States was named as a defendant. 22 I have a letter in which he advises us that he will file a 23 discontinuance without prejudice so that, as a party defendant 24 today, it is my understanding that the United States is not yet 25 in this case. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 28 1 THE COURT: Mr. Alter, you may have to leave. 2 MR. MOLLER: Trying to free him up for other 3 government work. 4 If you want to file the letter, I can file the letter. 5 THE COURT: It should be. File the letter. 6 There is an issue about clearance of government's 7 lawyers that I suppose that I need to address. 8 How is that going, Mr. Alter? 9 MR. ALTER: Your Honor -- 10 THE COURT: Not government, but to clear what lawyers 11 are in the case -- 12 MR. ALTER: You have the latest status report on that. 13 We had provided letters to the plaintiffs executive 14 committee, initially offering to clear eight attorneys from 15 that committee at this juncture. 16 We were also approached by the premises defendants 17 seeking nine clearances. We had a discussion at our October 23 18 meeting with liaison counsel where they explained their 19 concerns about the limitation on the numbers. 20 I have conferred with officials on this, and we stand 21 ready to clear 12 lawyers for the plaintiffs as the executive 22 committee for the plaintiff wishes to designate. 23 And because, really, at this juncture, the only group 24 of defendants, to our knowledge, who had an issue with regard 25 to clearance are the defendants outside the scope of the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 29 1 need-to-know category, we had advised them in a letter to the 2 Court and to those parties that we will clear four attorneys 3 for them at this juncture. 4 MR. WILLIAMSON: That is, he has advised us, your 5 Honor -- we were mindful, however, of your guidance at the last 6 conference that, while the government might not agree on the 7 number of people that would need to be permitted to look at SSI 8 material and would reserve its right to object, nevertheless 9 they told us to clear people so that there wouldn't be a delay 10 at that time. 11 THE COURT: We will start with the four, and if that 12 presents a problem, you let me know. 13 MR. WILLIAMSON: Fine. Thank you. 14 THE COURT: Mr. Alter raises the issue of how to 15 review decisions by the Secretary of Transportation. And that 16 sort of reminds me of Section 46110 which creates a system of 17 judicial review of decisions of the undersecretary of 18 transportation in the Court of Appeals. I am not learned in 19 that section. I am not sure that there is any decided wisdom 20 as to how to apply that section in a case like this. 21 I don't plan to develop any kind of procedure for 22 appeals. If appeals are necessary or appropriate, we can deal 23 with them at the time. And there are other avenues that are 24 provided in the Federal Rules of Civil Procedure and in federal 25 common law, generally, to take appeals from decisions that are SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 30 1 part of an interlocutory nature by the District Court. At this 2 point in time, I don't see any need to create any separate 3 procedure. 4 There is always a concern with interlocutory appeals 5 as to their effect on how a case progresses and as to the 6 adequacy of records in a Court of Appeals. So it is not an 7 easy issue. 8 I next want to deal with the issue that has been 9 tendered to me of applications to serve late notices of claims 10 under seal -- this is the Port Authority -- and the desire to 11 have the benefit of suspension with regard to such late notices 12 because of particular infirmities of the people. 13 Mr. Baumeister, you want to speak to this issue or Mr. 14 Moller? 15 MR. MOLLER: Mr. Baumeister has an issue on notice of 16 claim. 17 MR. BAUMEISTER: I will be very brief. 18 On the first point, 2A, mine is really a narrow 19 question on the order which is, simply, a client who came to me 20 after the 9/11, had never consulted with counsel, consulted 21 with me, after which retained my firm in October. 22 And facts came to light that her husband had gone from 23 the 81st floor down to the 72nd where he was safe, and then 24 went back to his place of employment when he was notified that 25 it was safe and was killed. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 31 1 She doesn't watch television, raising two small 2 children. And when I became aware, I said, I'm going to file 3 on your behalf. 4 And the narrow issue is that I have complied with the 5 strict letter of your order, which is to provide the data to 6 the Port Authority. And I wanted to make sure, your Honor, 7 that by simply filing the application, whether it is granted or 8 not, that the filing of the application would not constitute -- 9 because there was some question as to whether that alone would 10 constitute an election. I wanted to make sure it wasn't, 11 because I don't want to jeopardize the opportunity for this 12 client to go into the fund if that becomes a viable 13 alternative, but I wanted to keep her legal rights alive. 14 So I filed the application with the Court, and I 15 sought advisory opinion, I guess, from the Court. 16 THE COURT: Have you spoken with Mr. Feinberg on the 17 issue? 18 MR. BAUMEISTER: I haven't spoken to him on this 19 issue, your Honor, because, ultimately, if you remember, when 20 we go back to your initial ruling on putting things in 21 suspense, I have been engaged with Mr. Feinberg and Mr. Moller 22 for months of negotiation to get them to agree that it wouldn't 23 constitute the filing of the original notices. 24 THE COURT: You can represent to Mr. Feinberg that I 25 would be disposed to grant your application, but if he has SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 32 1 objection to it, I need to hear both of you. 2 He can't consent to it, but if he has no objection to 3 the procedure, you can tell him that I will sign an order, 4 propose giving him notice. Take that into consideration. 5 6 (Continued on next page) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 33 2B1YSEP2 1 MR. MOLLER: I will do that immediately. Thank you, 2 your Honor. 3 MR. HARRIS: May I just say, your Honor, the Port 4 Authority will follow your Honor's order in terms of responding 5 to this application. 6 THE COURT: Right. We have a procedure by which you 7 will identify to Mr. Baumeister if you object or except. 8 MR. HARRIS: Exactly. 9 THE COURT: If there is a ruling, I want to make that 10 ruling. 11 MR. MOLLER: Than another issue, in an earlier order, 12 the court ordered that the motion with respect to filing of 13 late notices of claim be of record by October 30. That has 14 been done, I believe certainly in our cases, so that we 15 complied with that part of your ruling. The question now is 16 how quickly does that have to be acted upon. 17 THE COURT: There is a priority. Within 20 days the 18 Port Authority shall acknowledge receipt of the application and 19 within 45 days either stipulate to allow the application or 20 file opposition papers. 21 MR. MOLLER: So we are waiting to hear from them as to 22 whether they want to hold that in suspend for some reason 23 waiting until motions are decided or deal with it right now. 24 THE COURT: No. If they want to oppose it, they have 25 to oppose it. If they don't oppose it, it is going to be with SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 34 2B1YSEP2 1 duress. 2 MR. MOLLER: Then a further question that we have is 3 whether that motion for late notice can be kept under seal in 4 order to protect the privacy of the individual. 5 THE COURT: I have a strong policy against allowing 6 filing under seal. We have looked very briefly at the 7 applications. 8 One application has attached to it a great number of 9 items of a doctor/patient relationship which I think should be 10 stripped from the file document and the rest of the documents 11 should be filed. You may need to redact parts of the document 12 itself. 13 No one needs to know the details of a medical 14 relationship, but the idea of a filing should be public and I 15 will not grant a blanket seal order. I will allow redaction. 16 You can work out privately with the Port Authority giving 17 information that is kept under seal by not being filed in the 18 public record. 19 MR. MOLLER: We will see what they do in 20 days and 20 we will work it out. 21 THE COURT: Well, the documents should be filed. 22 MR. MOLLER: It is filed. 23 THE COURT: I am not giving you permission to seal it. 24 I am giving you permission to withdraw it and refile it. 25 MR. MOLLER: We have to either movie quickly to either SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 35 2B1YSEP2 1 redact or withdraw. We will do that. 2 THE COURT: The clerk may require an order and your 3 order should provide that this will be deemed a filing by 4 October 30, permission to withdraw and substitute. 5 MR. MOLLER: We will incorporate that in the order 6 that you may want to have followed from this case. 7 THE COURT: If there is anything in any other 8 application that is of a particular private nature, you can 9 follow the same procedure. But in general there will not be a 10 sealing order. 11 MR. MOLLER: Thank you. 12 I have attached to the material I have distributed a 13 caption that you can all use so that any filing in this case 14 will be in a mass productive -- if the filing concerns all the 15 cases, it will be captioned In Re: September 11 Litigation with 16 a docket number 21 MV 97 (AKH). Please follow it. 17 I also distributed e-mails which will simplify sending 18 out notices of conference with no limited purpose. If the name 19 of a lawyer from your firm is not on the attached list, please 20 submit a card or note with the e-mail address, and I will say 21 if members of the press would like to have any notices, put 22 your name on the e-mail list as well and we will include it, 23 assuming someone from the press is here. I don't know. 24 We have a Web site as well. Certain opinions and 25 notices will be posted. The agenda identifies the Web address. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 36 2B1YSEP2 1 If the particular filing concerns a particular case, 2 of course, it gets filed in a particular case. 3 I think that covers everything I need cover today. Is 4 there anything anybody else wants to bring up? 5 MR. MOLLER: There is one scheduling issue I think 6 Mr. Hanly has with respect -- 7 MR. HANLY: Actually, your Honor, Paul Hanly for the 8 plaintiffs. 9 Mr. Harris and I discussed it and I don't think we 10 need take the court's time. It relates to the motion to 11 disqualify the Ness, Motley firm. 12 THE COURT: I read the papers. I am waiting for the 13 reply papers and I was planning to either address it promptly 14 or to more probably assign an argument date. 15 MR. HANLY: Yes, your Honor. 16 THE COURT: Which will be prompt. 17 MR. HARRIS: We were asking for a little more time for 18 the reply papers, Judge, and we -- 19 THE COURT: How much time do you need? 20 MR. HARRIS: A couple of days, your Honor. 21 THE COURT: You have it. 22 I think I received a letter. 23 MR. HARRIS: Yes, you did, and we want to find out 24 about the status of the letter. 25 THE COURT: It's not a problem. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 37 2B1YSEP2 1 I do think you should have been more accommodating to 2 each other on the give and take. 3 MR. HARRIS: We have since learned, Judge. 4 MR. HANLY: It's never too late. 5 Anything else? 6 (Pause) 7 Thank you very much. 8 - - - 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300