The terrorist attacks of September 11th produced a multitude of litigation. Although we are now more than twelve years removed from those tragic events, litigation continues.
On December 4, 2013, the United States Court of Appeals for the Second Circuit issued a significant decision in a case in which recovery was sought for considerable property damage in the wake of the attacks. As the decision acknowledged, "[t]he horrific events of September 11, 2001 are well known and need not be repeated here in great detail." Aegis Insurance Services, Inc. v. 7 World Trade Co., L.P. ("Aegis Insurance"), Docket No. 11-4403-cv (Dec. 4, 2013). Sometimes overlooked, however, is the fact that the Twin Towers were not the only structures that collapsed that day. In fact, all seven buildings comprising the World Trade Center Complex either collapsed on their own or were demolished later, including 7 World Trade Center ("7WTC"), a 47-story building constructed at the northern edge of the site.
7WTC was built above an electrical substation Con Ed had constructed at the World Trade Center Complex to provide electricity to the site. When the North Tower collapsed on September 11th, it caused a raging fire throughout 7WTC. "With no water, and no civilian lives at risk, and with their comrades buried in the Towers' debris, the fire department decided to create a collapse zone around 7WTC and allow the fire to burn, unchecked." Id. That evening, the building collapsed and crushed the substation.
Con Ed sued 7WTCo. (the builder), its agent, the general contractor and the structural engineer. Con Ed asserted that the building was designed and constructed in such a manner that it lacked structural integrity, and had it been properly constructed, it would have remained standing at the end of the day. 7WTCo. moved for summary judgment, arguing that no duty was owed to Con Ed insofar as the terrorist attack and its consequences were unforeseeable and that the building was properly designed and constructed but simply could not withstand these catastrophic events.
The district court granted summary judgment to 7WTCo., finding that no duty was owed to Con Ed to protect its substation; and even if a duty was owed, the risk of harm certainly did not "encompass the long chain of events on September 11, 2001." In re September 11 Litigation Aegis Ins. Servs., 865 F. Supp. 2d 370, 383 (S.D.N.Y. 2011). Con Ed appealed.
On appeal the Second Circuit affirmed, but on an alternative theory, namely, foreseeability. The Second Circuit's decision represents a more practical approach, and one best articulated by Judge Pooler in the following statement: "While the concepts underlying tort law must, by their nature, be fluid, at the end of the day they must engage reality." Aegis Insurance. The Second Circuit accepted that Con Ed, contrary to the lower court's ruling, was owed a duty of care. Whereas the attack itself was clearly unexpected, "[t]he risk of massive fire at a high-rise building is a foreseeable risk." Id.
Nevertheless, the Court agreed with 7WTCo. that the events of September 11th were "unprecedented" and of such a "magnitude" that any alleged negligence on the part of defendants could not have been "the cause-in-fact of the collapse." Id. The Court favored a cause-in-fact approach over a proximate cause analysis, conceding that it was "especially difficult to shoehorn this extraordinary sequence of events into the 'welter confusion' that is proximate cause." Id. Accordingly, the threshold inquiry was whether "the injury or loss would have occurred regardless of the conduct." Id.
As applied here, Con Ed and its experts failed "to relate the constellation of events surrounding the collapse of 7WTC or link the unprecedented nature of those events with the negligence at issue." Id. Because of this, the Court had "little trouble concluding" that "7WTC would have collapsed regardless of any negligence ascribed by plaintiffs' experts" to the design and construction professionals. Id.
This decision is significant for several reasons. It affords developers, builders and architects added protection from lawsuits linked to catastrophic events. As the Court explained, "[i]t is simply incompatible with common sense and experience to hold that defendants were required to design and construct a building that would survive the events of September 11, 2001." Id. Moreover, it may prompt a shift by the courts from an analysis that focuses almost exclusively on proximate cause, to one that considers, at least in part, the practicalities associated with the claimed injury or loss. If so, this decision will have broader application to all negligence cases.
If you require further information regarding this legal alert, please contact Thomas B. Cronmiller, Chair of the Torts & Products Liability Defense Practice Area at (585) 295-4424 or tcronmiller@hblaw.com.