American Airlines and other defendants sued in connection with the 9/11 terror attacks can claim the act of war defense to strict liability under a federal hazardous substance cleanup law, Southern District Judge Alvin Hellerstein (See Profile) ruled yesterday.

Hellerstein said in In re September 11 Litigation, 08 Civ. 9146 (AKH), that the exception to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) was another reason why the owners of a building one block south of the World Trade Center cannot recover for damages and the cleanup of pulverized dust created when the twin towers collapsed.

The judge had already ruled in 2010 that Cedar & Washington, the owner of the 12-story building at 130 Cedar St., could not recover under the act against the World Trade Center owner, the Port Authority of New York and New Jersey, corporations affiliated with trade center lessee Larry Silverstein, and American and United airlines.

That ruling was based on the running of the six-year statute of limitations and the judge’s holding that damages to the building did not fit the definition of a "release," such as a spilling, leaking or discharging, under the act, 42 U.S.C. §9601(22), nor were the building’s structure and contents "solid waste or hazardous waste" under §9603(3).

Cedar & Washington appealed, and the U.S. Court of Appeals for the Second Circuit in 2012 remanded for Hellerstein to consider the "threshold question" of "whether the attack on the World Trade Center on September 11 was an ‘act of war’ within the meaning of CERCLA’s affirmative defense."

The act, which imposes strict liability for the release of hazardous substances, was passed in response to environmental damage at such notorious sites as Love Canal in New York and the Valley of the Drums in Kentucky.

The exceptions to strict liability are for acts of God such as natural disasters, acts of war or if the release is caused by a third party.

But Hellerstein said the statute does not define acts of war, Congress has declined to include terrorism as acts of war on more than one occasion, and the defense "has been raised infrequently and without success."

In fact, he said, the only case where it was discussed to any extent was in United States v. Shell Oil, 294 F.3d 1045 (2002), where the United States sued companies for dumping acid waste by-products in making high-octane aviation fuels critical in World War II.

A district court in California and then the Ninth Circuit rejected the defense on the grounds that industrial activities in Fullerton, Calif., that were collateral to the war effort were not "acts of war."

The Ninth Circuit, Hellerstein said, emphasized that the act’s liability provisions were to be read expansively and its defenses narrowly.

"The case before me, unlike Shell Oil, does not involve the consequences of a response to an ‘act of war,’" Hellerstein said. "Cedar & Washington alleges to have been damaged by the catastrophe itself" inflicted by al Qaida "intending to attack, as Bin Laden characterized it, the ‘far enemy.’"

The United States, he said, recognized the attack as an act of war, despite the traditional definition of acts of war as confined to hostilities between nation states.

Insurance contracts have typically made the distinction between acts of terrorism and acts of war, for instance, when the Popular Front for the Liberation of Palestine’s hijacking and destruction of an airplane was found not to be an act of war in Pan American World Airways v. Aetna Casualty & Surety, 505 F.2d 989 (2d Cir. 1974).

"But nothing in the cases approaches the catastrophe of 9/11, nor was the Popular Front for the Liberation of Palestine equal in organizational scope or destructive intent to al Qaeda, nor was the destruction of an airplane at an airport by that group the equivalent of the destruction of the World Trade Center and the damage to the Pentagon," Hellerstein said.

Sept. 11, he said, "was an attack that Congress and the President treated as an act of war against the United States. The events of Sept. 11 were unique, and Congress, the President, and the American public treated 9/11 as unique."

The judge noted that, in passing the Authorization for Use of Military Force on Sept. 14, 2001, Congress, "within the meaning of section 5(b) of the War Powers Resolution" gave the president the authority to exercise his powers "as Commander-in-Chief to introduce United States Armed Forces into hostilities."

He continued, "The nation went to war in Afghanistan because we considered the terrorist acts on New York and Washington to be acts of war," and the U.S. Supreme Court accepted that premise in two major cases on enemy detention: Hamdi v. Rumsfeld, 542 U.S. 507 (2004), and Hamdan v. Rumsfeld, 548 U.S. 557 (2006).

Hellerstein cautioned that his ruling should be read narrowly, "fitting the facts of this case only."

Jay Spievack and Sari Kolatch of Cohen Tauber Spievack & Wagner represent the plaintiffs.

Desmond Barry of Condon & Forsyth represents American Airlines.

Timothy Keane of Quirk and Bakalor represents United Airlines.

Christopher Walsh of Gibbons represents HMH WTC LLC.

Peter Winik of Latham & Watkins represents WTC Retail.

Beth Jacob of Schiff Harden represents the Port Authority.

Kimberly Ailisa Pallen of Flemming Zulack Williamson Zauderer represents Silverstein Properties.

Charlie Rysavy of K&L Gates represented Con Edison.