Mark Hamblett, New York Law Journal
Southern District of New York Judge Alvin K. Hellerstein gave his stamp of approval today to a renegotiated settlement of suits filed by 10,000 plaintiffs who suffered respiratory and other illnesses in the wake of the 9/11 terror attacks.
Almost three months after sending the lawyers back to the bargaining table because he said that their original $657 million pact paid too little to injured rescue and cleanup workers, Hellerstein pronounced his enthusiastic support for the new settlement.
"This is a very good deal," the judge said from the bench during today's hearing. "I am very excited about this deal."
The new $712.5 million settlement is likely to increase by as much as $125 million the payout to those injured by the toxic dust at Ground Zero after Sept. 11, 2001.
The deal was achieved by compromise on three sides. New York City waived certain workers' compensation liens, adding up to about $25 million; plaintiffs attorneys agreed to cap their fees, sending an additional $50 million to their clients; and a decision by the World Trade Center Captive Insurance Co., created to cover the Ground Zero insurance costs for the city and its contractors, came up with at least another $50 million.
Margaret Warner of McDermott Will & Emery, who represents the WTC Captive, gave a spirted defense of the new agreement, which was demanded by Judge Hellerstein at a March 19 hearing, even though all sides questioned his authority to intervene.
"After hearing Your Honor's concerns [on March 19]," Warner told the judge today, "my client gave me the clear, albeit challenging, instruction to find a way to hold this settlement together."
Hellerstein scheduled a June 23 fairness hearing on the new settlement, a hearing that the lawyers object to but are helpless to prevent.
The judge signed his preliminary approval of the 104-page settlement at the close of today's hearing. He appointed an allocation neutral, The Garretson Resolution Group, to examine the claims of each plaintiff and determine where they fit on a complex grid that measures the type of injury, its severity and the amount of payment.
Hellerstein also appointed as claims appeal neutral, Kenneth R. Feinberg, who was head of the Sept.11 Victim Compensation Fund. Feinberg, who will handle appeals from the Garretson [Group]'s decisions, will work pro bono.
Corporate Counsel Michael Cardozo rose briefly during the hearing to say that his office and New York City Mayor Michael R. Bloomberg fully supported the settlement.
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