A divided U.S. Court of Appeals for the Second Circuit upheld a finding of summary judgment against Con Edison insurers in their bid to collect damages from World Trade center leaseholder Larry Silverstein for the destruction of the Con Ed substation at 7 World Trade after fire commanders determined late in the day of Sept. 11, 2001, that the building could not be saved.
The circuit also affirmed the dismissal of claims against other defendants involved in the construction and design of the building.
“It is simply incompatible with common sense and experience to hold that defendants were required to design and construct a building that would survive the events of Sept. 11, 2001,” a two-judge majority said in Aegis Insurance Services v. 7 World Trade Center, 11-4403-cv.
The ruling upholds a grant of summary judgment by Southern District Judge Alvin Hellerstein (See Profile) in favor of developer Larry Silverstein’s 7 World Trade Company in 2011 and Hellerstein’s granting of motions to dismiss in 2006 for defendants involved in the construction of the building: Tishman Construction Corp. and the Office of Irwin Cantor.
In dismissing the case against Tishman and Cantor, Hellerstein said the two owed a duty of care to those “entitled to receive the benefit of their work or services or products” but not to third parties such as ConEd.
In granting summary judgment to 7 World, Hellerstein had ruled that, while there was a duty to protect the substation from risk of harm, that duty did not “encompass the long chain of events on September 11, 2001,” as the events of that day were not foreseeable.
“[E]ven assuming negligence on the part of the defendants, any such negligence was not the cause-in-fact of the collapse of 7 WTC,” Pooler said for the court.
She said plaintiffs’ experts’ reports on how the building could have been designed differently to avoid collapse were “too speculative to avoid summary judgment.”
Judge Richard Wesley (See Profile) dissented, saying a trial was merited, as the plaintiffs had identified a standard of care—”high rise buildings must be built to withstand a fire that cannot be extinguished by the efforts of firefighters” and alleged a “deviation from that standard” in the case of 7 WTC.
“One would think that, on this record, the majority would want to hear from defendants’ experts on why 7 WTC collapsed,” Wesley said.
But Pooler and Parker said fire department commanders were “faced with this unprecedented constellation of events” that began when al Qaida terrorists hijacked American Airlines Flight 11 and United Airlines Flight 175 and flew them into the twin towers on the morning of Sept. 11, 2001, killing some 2,700 people, including 343 New York City firefighters and paramedics.
The collapse of the twin towers sent debris raining down on 7 World causing structural damage, starting fires on several floors in the building and severing the water main needed to fight the blazes.
“With no water, no civilian lives at risk and with their comrades buried in the Tower’s debris, the fire department decided to create a collapse zone around 7WTC and allow the fire to burn, unchecked,” Pooler said.
ConEd experts said the collapse of World Trade Center One and World Trade Center Two did not cause structural damage to 7 World. They said the building should have survived the fires even without a sprinkler system or an effort to fight the fires.
But Pooler said the lower court erred in granting summary judgment on the grounds that the events of Sept. 11 were not foreseeable and thus the defendants owed no duty to Con Edison. “The risk of a massive fire at a high-rise building such as 7WTC is a foreseeable risk and the district court erred in finding otherwise,” she said.
But that doesn’t settle the matter of liability and the real basis for summary judgment was the cause-in-fact of the collapse, despite what ConEd’s experts said about the building’s design and construction vulnerabilities, Pooler said.
“None of the expert reports,” she said, “address in any substantive or adequate way the interaction between the identified ‘vulnerabilities’ and the unprecedented etiology and severity of the cataclysm that engulfed lower Manhattan on September 11, 2001.”
“Con Ed’s primary argument is an unsought fire would not have caused 7WTC to collapse had the building been properly designed and constructed,” she said. “But Con Ed’s focus on the fires that engulfed 7WTC carves out what occurred on September 11, and this we cannot do.”
Franklin Sachs of Greenbaum, Rowe, Smith & Davis in Woodbridge, New Jersey argued for the insurance companies.
Katherine Pringle of Friedman Kaplan Seiler & Adelman argued for 7 World.
Anita Weinstein of Cozen O’Connor argued for Tishman.
Stephen Schreckinger of Gogick, Byrne & O’Neill argued for Cantor, a structural engineering firm.
“We never thought that our client Irwin Cantor should have been a part of this lawsuit, or, for that matter, the other defendants,” Schreckinger said.
@|Mark Hamblett can be contacted at email@example.com.