Font Size: 
9/11 Mediator Wraps Up Work; Only 3 Cases Left Unsettled
New York Law Journal
March 06, 2009
Three years after she began the "heart-wrenching" and "emotionally draining" experience of mediating wrongful-death and personal-injury lawsuits that arose out of the Sept. 11 terror attacks, it is impossible to tell whether the litigants received better recoveries than people who went through a compensation fund created by Congress, attorney Sheila L. Birnbaum said in a final report to Southern District of New York Judge Alvin Hellerstein.
Birnbaum's report, which was accepted by Hellerstein last week, details efforts that have left all but three of 95 cases settled for a total of $500 million.
Birnbaum, a partner at Skadden, Arps, Slate, Meagher & Flom, reported that the families of the those killed in the attacks "probably" did better by litigating rather than going through the fund, but "it is impossible to judge whether people similarly situated" did better or worse "regardless of any differences in gross settlement amounts."
Read the order in In Re: September 11 Litigation.
Several factors accounted for the inability to make the comparison, she said, including that people who went through the fund did not have to pay attorney fees.
Ninety-seven percent of those who lost family members or were injured in the attacks elected to go through the federal September 11th Victim Compensation Fund of 2001 administered by Special Master Kenneth R. Feinberg.
The fund ultimately awarded $7 billion on 5,560 claims.
Claimants who chose to sue the airlines, security companies and other defendants, Birnbaum said, took the risk that their efforts would be unsuccessful and also had to face extended discovery.
Thirteen cases already had been settled when Birnbaum, assisted by Skadden's Thomas E. Fox, began mediating cases in February 2006. By May 2006, another 12 had settled.
But Birnbaum said in her report that an obstacle to settlement for many families was that they had not had a chance to "tell the story of their loss" to the judge or to the airlines or to personally receive condolences from an airline representative.
So Birnbaum held mediation sessions with family members and airline representatives in Washington, D.C., Boston and New York, including some that were attended by Judge Hellerstein. She described the sessions in her report as a "heart-wrenching and emotionally draining experience for all involved."
But the bulk of the cases were settled by October 2007.
Hellerstein in an opinion praised Birnbaum for her "extraordinary work."
Birnbaum said Thursday in a phone interview that "for some in the litigation, what was at stake was more than a financial settlement."
"There was an emotional response and they wanted to find that someone was responsible other than the terrorists because of the grief they were feeling," she said. "For some, it was important to tell their story to the airlines and to the mediator so the memory of the person they loved and lost was somehow more cherished."
Settlements in four of the cases were overturned by Hellerstein in July 2008, when he found the Maryland firm of Azrael Gann & Franz was asking for a "large windfall" of 25 percent of a $28.5 million recovery.
That sent the parties back to the table and Birnbaum. New settlements that were ultimately approved by the court were reached in October 2008.
Birnbaum said in the interview there were too many moving pieces to allow for a straightforward comparison between those who opted for litigation and those who were compensated by the fund.
Birnbaum reported to Hellerstein that the families of decedents with higher incomes probably did better by suing "because of the rules governing the fund, including deductions for collateral sources of recovery such as life insurance policies."
"What people got in the fund was an immediate result that was more or less easy to define based on what was appropriate," she said in the interview. "Here, people took a risk that they may or may not have been successful and they certainly waited a lot longer to get paid. We also had to follow whatever the rules of law were and that differed from state to state and litigant to litigant.
"What we tried to do was treat fairly across the board people who were similarly situated, but even then there were lots of variations that we had to take into consideration that the fund did not," she said. "There is no apples to apples comparison. Some people might have done better and some might have done worse."
Mediation was attempted in the three remaining unsettled cases, but families and their attorneys, including attorney Donald Migliori of Motley Rice, pressed forward for a trial because they want a full public accounting of what happened on Sept. 11, 2001.
"Some want a trial, because they want to tell their stories," Birnbaum said.
