Why In The End, The Plan Is Fair To All

Monday, Feb. 11, 2002

The debate over the September 11th Victim Compensation Fund of 2001 has become a Rorschach Test of America's views about equality, desert and community. Some families who lost loved ones as a result of the terrorist attack have raised a host of criticisms of the plan. These families want society to honor the dead fully. They want an opportunity to seek the truth. They want to hold wrongdoers responsible. What can those of us who defend the plan say in response?

In my opinion, the problem with the plan is not only that it was created out of questionable motives, as I discussed in a recent piece for Newsday. The plan is a good one, despite its history. The problem with the plan is that its legal foundations have not been fully explained.

The plan's legal foundations have not been fully explained, I suspect, because to do so inevitably divides the victims of the September 11th attack into three very distinct groups- familes of air passengers from the four flights that crashed; families of those who died in the World Trade Center and the Pentagon; and property owners who lost millions as a result of the attacks.

That kind of division is something that may be politically costly right now, when the importance unity is emphasized. Nevertheless, explicating the legal basis for the plan is a task worth taking on, because a careful examination of the three groups of victims and how they are treated has the effect of vindicating, rather than undermining, Congress' plan. In this column, I will attempt to do just that.

Are Air Passengers' Families Getting Less Than They Would In a Typical Crash?

Let's go back to basic tort law. When an airplane crashes in the United States, there is almost never any litigation. This is because negligence is easily attributed to the owner of the plane by juries through the tort law doctrine of res ipsa loquitur. Res ipsa loquitur means "the thing speaks for itself" - meaning, roughly speaking, that the accident would never have happened if there hadn't been negligence, so its very occurrence persuasively establishes that negligence occurred, whether it took the form of mechanical failure or pilot error.

Because of the res ipsa doctrine, airlines hardly ever try to defend their planes and crews, even when they believe that there was no negligence. Trying to establish lack of negligence when the law presumes negligence from the very accident is an uphill battle, to say the least. Moreover, playing litigation hardball against passengers' families would, in any event, be a public relations debacle and only call more attention to the allegations of negligence and to the crash - as well as raising questions in the public mind at to whether the airline may be in denial about problems with its planes or pilots.

In practice, what airlines do is buy a lot of insurance and settle with all the passengers' families. Thus, unsurprisingly, it has been reported that each of the four planes that were hijacked on September 11 was carrying about $1.5 billion insurance per plane.

Of the approximately 3100 people killed by the terrorists, 266 were on the airplanes. Had these 266 been the only casualties (perhaps because the planes all crashed in open fields), the airline industry would probably have dealt with the legal aftermath of the attack in much the same way that it dealt with the crash of American Airlines 587 in Queens a few weeks later, in which 260 people died. That is to say, even if the airlines were convinced that they bore no legal responsibility for the deaths brought about by hijacking, they would have settled comfortably within their insurance coverage.

From a legal perspective, what made the crashes of September 11 different from other air disasters was not that the four planes perished as a result of criminal acts. It was, instead, the nature and scale of the ground damage.

The airlines' $1.5 billion coverage per plane could cover the passengers, but not the lives in the World Trade Center, nor the cost of the destruction of the towers themselves. It was liability for these extra injuries and costs that Congress intended to block when it passed the September 22 legislation that set up the September 11 Victims Compensation Fund. (The legislation itself is discussed at greater length in one of my previous columns).

The complaints of families of passengers who were on the planes that crashed on September 11 make simple, practical sense. When they say that they could expect more than what Congress is offering (an average of $1.6 million person, minus collateral setoffs), they are right. Although settlement figures are hard to come by, my sense is that if this were any other crash, they would have received much more. After all, the $1.5 billion in insurance coverage would easily have allowed multimillion dollar settlements with 266 families. But there were far more than 266 families affected.

Trying to Protect All of The Families of Those Who Died September 11th

In a sense, then, the families of the passengers who were on the planes are being treated worse than the typical victim of airplane crashes because of Congress's desire to protect the airlines from claims by two other groups: families of people in the World Trade Center and the Pentagon, and property owners directly affected by the planes' crashes. However, if one really thinks about it, the families of the airplane passengers may not be worse off at all. It all depends what happens to the claims made on behalf of victims on the ground.

The first important thing to remember is that the law passed by Congress does not prevent anyone from suing the airlines (or anyone else, for that matter). It does say that, except for the terrorists themselves and the security firms who allowed the terrorists to board on September 11, if any defendant is sued for any type of claim arising from the attack, that defendant will be held liable only up to its insurance coverage.

There is almost certainly enough insurance money to cover the passengers in the four hijacked planes - and, indeed, to give them more compensation that the typical award under the legislation. As a result, one might initially think that there is no reason for a family of a passenger to accept the government program. Their right to sue is effectively untouched by Congress, and there is enough insurance money for all the passengers' families to receive more than they would under Congress' plan.

This logic does make sense - but there is one catch. What if the families of the other 2800 victims and the owner of the lease for the World Trade Center, Larry Silverstein, decide to sue the airlines too? Suppose they did, and suppose also that the airlines' insurers were to settle with these other parties at the same rate as they historically have settled with passengers, a reasonable assumption.

The result would be that the insurance money on the two planes that struck the WTC would certainly disappear, and everyone - the air passengers' families included - would either end up receiving much less than they would had they accepted Congress's fund payments or, worse, would end up receiving either a windfall or nothing at all, based whether they prevailed in the race to see who could settle fastest, before insurance proceeds would be used up.

Whether the same logic applies for the plane that struck the Pentagon is less clear; because there were fewer ground casualties, and it is unlikely the government would sue the very airlines they just bailed out for the property damage. Accordingly, it is possible that it might be financially beneficial for the families of both the air passengers and those who were killed in the Pentagon itself to opt out of the September 11 fund; even if everyone were to opt out, there might still be enough money to give everyone a greater award than they would receive from the fund. But there is an important reason the families might still choose to go with the fund: They would be subject to the same race to settle first with the airline.

The Three Different Groups Have Differing Chances of Litigation Success

Here is where a little more honesty by Congress would have been useful, in my opinion. The truth is, the odds of winning a lawsuit against the airline are very different depending on whether the suit is brought on behalf of a passenger, a person sitting in the WTC, or the owner of the WTC.

Assume that the airlines were negligent in some way that caused the planes to be hijacked. I feel that this is very unlikely, but without discovery, we must leave the possibility open. Such negligence would clearly result in compensation for the passengers, if they were to go to court - but not necessarily for anyone on the ground.

Of course, when planes crash, it foreseeable that they might hit buildings and people on the ground. American Airlines 587 hit 12 homes and killed six people when it crashed. And, just as airlines almost never litigate negligence issues with regard to passengers, they almost never litigate the ground damage claims that accompany the typical air crash case, preferring to settle instead.

But, again, this is not a typical air crash case. The reason why airlines do not litigate ground damage claims based in negligence is because it isn't efficient to do so: when one is paying out 300 claims, another 10 claims are not worth fighting about. But if deaths from ground damage were to form the bulk of the settlement demands, the airlines would certainly go to trial.

If they were to go to trial, the very unusual circumstances of this case would make the plaintiffs' prospects quite bleak. Even if we assume negligence, the doctrine of "proximate cause" might prove to be an insuperable barrier.

How the "Proximate Cause" Doctrine Could Defeat Some Victims' Claims

In tort, one is not liable for every injury caused by one's negligence. Rather, one is liable only up to a point - only, that is, for those consequences that are a foreseeable result of one's breach of duty. (The negligence is said to be the "proximate cause" of these consequences, but not of others).

Modern lawyers are fond of saying that this means nothing-that any clever lawyer can convince a judge to allow a jury to decide what is and is not a foreseeable consequence, and then find that everything caused by negligence was also proximately caused by, and can thus be compensated. But those who treat the problem of proximate cause lightly do so at their peril.

The truth is, no one really knows how the New York courts would treat the plaintiffs' argument. The families of those in the WTC (and Larry Silverstein, perhaps) would have to argue that the intentional suicide flight of the airlines' planes into a huge building was a foreseeable consequence of their failure to detect or prevent the criminal acts of third parties.

Yet there had never really been a hijacking like this before. One of the great sadnesses of September 11 was that it was not foreseen - and perhaps not foreseeable, either. Previously, airlines had been on the lookout for two basic types of risks: the risk of remote explosive devices, and the risk of airplanes being taken over by hijackers who, though they might take hostages, wanted to go somewhere, negotiate, and escape alive.

What happened on September 11 has changed our view of the type of intervening criminal acts that could result from a breach of security. Yet the proximate cause determination must be based on what was foreseeable on September 10, not September 12. Twenty-twenty hindsight is not the perspective a jury is required to adopt; rather, foreseeability must be judged as of the time of the event in question.

Criminal Acts and "Proximate Cause"

In the past, intervening criminal acts were, by definition, never a foreseeable consequence of negligence. In some cases, that made sense: Consider a company whose machine is slightly defective, so that a factory worker must go to the hospital because the machine scraped his hand. At the hospital, the factory worked is killed by another, murderous patient. The company should probably pay only for the hurt hand, even though if it were not for its negligence, the killing would not have happened, either, for the factory worker would never have had to go to the hospital.

But in many cases, the doctrine did not make sense. Accordingly, the modern trend is for to soften the doctrine considerably. For example, a landlord can be liable for a criminal assault in his building that was facilitated by his negligent failure to install safety lights.

However, the courts still demand a reasonably tight connection between the type of negligence alleged and the type of consequence that occurred. Accordingly, in one of the few reported cases of this type, a jury rejected the claim that a foreseeable consequence of Pan Am's misconduct in connection with its security program was the death of twenty passengers at the hands of terrorists who invaded their airplane on the runway in Karachi, Pakistan. Anyone who believes that any of the September 11th families would be sure to win their cases in court should look at this decision, and reconsider.

The Victims' Fund Succeeds By Treating The Families Alike

Looking back on what Congress did when it enacted the legislation that led to the September 11th Victims Compensation Fund, it seems to me that it was, frankly, unnecessary. The families of the passengers didn't need the plan and still don't.

The airlines didn't need to be protected from the families of passengers and, in fact, still aren't. Meanwhile, the other potential plaintiffs-the families of the people on the ground and the owners of property on the ground-though they, too, suffered a terrible tragedy, nevertheless have such weak legal claims, due to foreseeability issues, that it is not clear to me why Congress had to pass a law to protect the airlines from these claims.

Perhaps the answer to the question of why the legislation was necessary is so obvious I don't need to say it: the plan erases all differences between the families of the victims of that horrible day. On its face, it treats some worse and others better in order to achieve a measure of social solidarity and political unity. That may not be such a bad thing. That is why I support the plan.

Anthony J. Sebok, a FindLaw columnist, is a Professor of Law at Brooklyn Law School, where he teaches Torts, among other subjects. Professor Sebok has written several other columns on the September 11th victim compensation fund, and several columns on mass tort litigation, for FindLaw; they can be located in the archive of his columns on the site.

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