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Lawsuits by firefighters and rescue workers who claim they suffered respiratory injuries at the World Trade Center site belong in federal, not state, court, a federal appeals court ruled last week. In a 46-page decision, the 2nd U.S. Circuit Court of Appeals questioned the reasoning of a Southern District judge who remanded to state court all suits dealing with injuries after Sept. 29, 2001, the day the World Trade Center rescue operation officially ended. The appeals court, however, left it up to the judge, Southern District Judge Alvin K. Hellerstein, to rectify the matter, saying it was prohibited from reviewing an order that remanded cases to state court for lack of subject matter jurisdiction, even if the order was erroneous. But the appeals court in In re: WTC Disaster Site clearly suggested what action Hellerstein should take. “Given our view that the respiratory injury claims before the district court are preempted by [the Air Transportation Safety and System Stabilization Act (ATSSSA) of 2001] and are claims over which the district court has exclusive jurisdiction, we invite the district court, in any such actions as remain pending before it, to reconsider so much of its decision as ordered remands to state court,” wrote Judge Amalya L. Kearse for the unanimous court. Lawyers for the plaintiffs and attorneys representing the city and contractors named in the suits said they expected Judge Hellerstein to reclaim the cases. He had stayed his remand order until the 2nd Circuit could weigh in. “The ball is in Judge Hellerstein’s court,” said Kenneth A. Becker, an assistant corporation counsel who is chief of the office’s World Trade Center division. “We have every reason to believe that Judge Hellerstein will follow this decision,” said James E. Tyrrell, a partner at the Newark office of Latham & Watkins, which is acting as lead counsel for the city and its contractors. Attorneys for the plaintiffs — hundreds of firefighters who say they suffered debilitating, even career-ending respiratory injuries from toxic fumes at the site — had urged Hellerstein to remand the suits to state court. The Air Transportation Safety and System Stabilization Act, enacted shortly after the terrorist attacks of Sept. 11, 2001, limited the city’s liability in Trade Center lawsuits to the greater of $350 million or the city’s insurance coverage. In state court, the plaintiffs would not have had to contend with a cap. Last week, though, Frank V. Floriani, a partner at Sullivan Papain Block McGrath & Cannavo, which represents 175 firefighters, said the plaintiffs would not be hurt by a move to federal court. “We are okay with that,” he said. “Our causes of action are still intact.” The 2nd Circuit affirmed Hellerstein as to the cases he kept under his jurisdiction. But it questioned the dividing lines the judge created when he ruled that all claims after Sept. 29, along with any claims that arose from debris that was moved off site, whether or not they arose before Sept. 29, would not be covered by the federal act. “The district court’s geographical line would mean that, as to a given pile of debris that gave off toxic fumes both at the World Trade Center site and at a marine transfer station or the landfill to which it was transported, the claim of a worker who inhaled those fumes at the World Trade Center site would be preempted, while the claim of a worker who inhaled fumes from the same debris at either of the other sites would not,” Kearse wrote. “In sum, in making the ATSSSA-created federal cause of action the exclusive remedy for damages arising out of the September 11 plane crashes, Congress clearly expressed its intent to preempt state-law remedies for damages claims arising out of those crashes.” The next stages of the litigation likely will deal with immunity claims from the city. The true nature of the cap also will be a subject of dispute, now that Congress, the state and the city have created the World Trade Center Captive Insurance Company. The company is funded by $1 billion in federal money to indemnify the city and its contractors and sub-contractors against Trade Center claims. Tyrrell said the fund was not created to simply increase the liability of the defendants to $1 billion. Judges Jose A. Cabranes and Edward R. Korman, the chief judge of U.S. District Court for the Eastern District, who was sitting by designation, concurred on the ruling. Stephen C. Glasser, of counsel at Sullivan Papain, argued the appeal for the plaintiffs. Ryan S. Goldstein and Robin Wertheimer represented the majority of those plaintiffs not represented by Sullivan Papain. Richard A. Williamson of Flemming, Zulack & Williamson represented The Port Authority of New York and New Jersey and World Trade Center Properties, an affiliation of Trade Center leaseholder Larry A. Silverstein.

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