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Media Alerts - Aegis Insurance Services, Inc. v. 7 World Trade Center Co. - Second Circuit
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December 4, 2013
  Aegis Insurance Services, Inc. v. 7 World Trade Center Co. - Second Circuit
Headline: Second Circuit Affirms Dismissal of Con Ed Suit Seeking Damages for Destruction of Electrical Substation Resulting from Collapse of 7 World Trade Center on September 11, 2001

Area of Law: Torts

Issue(s) Presented: Whether the designers, constructors, and operators of the 7 World Trade Center building could be held liable for negligence for the collapse of that building following the September 11, 2001 terrorist attack on the Twin Towers.

Brief Summary: Fiery debris from the collapse of the World Trade Center's North Tower on September 11, 2001 crashed into the evacuated 7 World Trade Center Building ("7WTC"), taking out chunks of the building and igniting fires on multiple floors. Already facing with the loss of over 300 firefighters in the Twin Towers' collapse and a severed water supply, the New York City Fire Department designated the area as a collapse zone and did not attempt to extinguish the fire. When 7WTC collapsed after burning for several hours, it destroyed the electrical substation that sat underneath it, owned by Consolidated Edison Co. Of New York, Inc. ("Con Ed").

Con Ed and its insurers sued the defendants, the designers, builders and operators of 7WTC, alleging that their negligence in design and construction caused the 7WTC collapse. In a 2006 decision ruling on certain of the defendants' motion to dismiss, and a 2011 ruling on another of the defendant's motion for summary judgment, the United States District Court for the Southern District of New York dismissed the negligence claims on the grounds that defendants did not owe Con Ed a duty of care and that any general duty owed to Con Ed did not include the improbable "chain of events on September 11" leading to the substation's destruction. The Second Circuit majority affirmed the dismissal, but on alternative grounds, holding that although the District Court erred in finding defendants did not owe Con Ed a duty of care, given "the unprecedented nature and sheer magnitude of the events of September 11," Con Ed could not demonstrate that negligence on the part of these defendants was the "cause-in-fact" of the 7WTC collapse. In a brief dissent, Circuit Judge Wesley argued that the case should have been remanded for review by the trial court of defense experts on the issue of causation and/or a trial to determine whether Con Ed could demonstrate causation.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...088e207c8f6/1/hilite/

Extended Summary: When the North Tower of the World Trade Center site collapsed on September 11, 2001 as a result of the terrorist attacks that morning, extensive fiery debris fell in the surrounding area, including onto the already-evacuated 7 World Trade Center Building ("7WTC"). The falling debris took chunks out of 7WTC and ignited extensive fires on multiple floors. Already dealing with the extensive loss of life of firefighters, and a damaged and limited water supply, the New York City Fire Department made the decision not to attempt to squelch the fire, instead establishing the area as a collapse zone. After burning for seven hours, 7WTC collapsed, destroying the Consolidated Edison Co. Of New York, Inc. ("Con Ed") electrical substation that sat underneath it

Con Ed and its insurers sued New York City, the Port Authority, 7 World Trade Company, L.P., Silverstein Development Corp., Silverstein Properties, Inc., Tishman Construction Corporation ("Tishman"), and Office of Irwin G. Cantor P.C., ("Cantor)" (collectively, the "defendants"), the designers, builders, and operators, of 7WTC, alleging that their negligence caused the building to collapse. After the United States District Court for the Southern District of New York dismissed the claims against New York City and Port Authority, defendants Tishman, and Cantor, and others, moved to dismiss the complaint for failure to state a claim. The district court granted the motion on the ground that these defendants owed no duty of care to Con Ed. Con Ed subsequently filed a second amended complaint and defendant 7 World Trade Company moved for summary judgment. In its opposition, Con Ed argued that 7WTC had been negligently designed and constructed and submitted opinions from multiple experts asserting that, had 7WTC been properly designed and constructed, it would have survived the September 11, 2001 events. Defendant 7 World Trade Company did not submit expert reports to counter those submitted by Con Ed, and none were requested by the District Court. The district court granted summary judgment to 7 World Trade Company, holding no duty of care was owed to Con Ed and the "improbable and attenuated chain of events" leading to the collapse following the September 11 terrorist attacks were not foreseeable to the defendant. Con Ed appealed the order dismissing the claims against Tishman and Cantor and the later order granting summary judgment to 7 World Trade Company.

The Second Circuit held that the district court erred in finding that no duty was owed to Con Ed by the defendants, but nevertheless affirmed the ruling on both the motion to dismiss and summary judgment on an alternative ground. The court found that 7 World Trade Company owed Con Ed a general duty "not to expose it to unreasonable risk because of negligent building design, construction, or maintenance," in the event of a massive fire, a foreseeable risk to a large office building, regardless of whether the precise events leading to the fire - here, terrorists hijacking and flying planes into the Twin Towers - were foreseeable. The court held, however, that Con Ed failed to raise a genuine issue of fact on the required element of whether defendants' actions were the "cause-in-fact" of the resulting injury. The Second Circuit found that the evidence presented by Con Ed was too speculative and did not sufficiently connect the alleged faults in design and construction of 7WTC to the specific constellation of events - the damage to the buildings from the North Tower collapse, the falling debris that ignited fires on multiple floors, the loss of 343 firefighters in the Towers' collapse, the severed water source - that occurred on September 11. The court thus concluded, "t 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 September 11, 2001."

In a brief dissent, Circuit Judge Wesley argued that, in light of the expert testimony presented by Con Ed, the case should have been remanded for review by the trial court of defense experts on the issue of causation and/or a trial to determine whether Con Ed could demonstrate causation.

To read the full opinion, please visit:
http://www.ca2.uscourts.gov/de...088e207c8f6/1/hilite/

Panel: Judges Pooler, Parker, and Wesley.

Argument Date: 09/12/2012

Date of Issued Opinion: 12/04/2013

Docket Number: No. 11-4403-cv

Decided: Affirmed

Case Alert Author: Bárbara M. Santisteban

Counsel: Franklin M. Sachs, Greenbaum, Rowe, Smith & Davis, LLP, Woodbridge, New Jersey (Mark L. Antin, Gennet, Antin, & Robinson, P.C., Parsippany, New Jersey, on the brief), for Plaintiffs-Appellants.

Katherine L. Pringle, Friedman Kaplan Seiler & Adelman LLP, New York, New York (Eric Seiler, Robert D. Kaplan, Kent K. Anker, Jeffrey R. Wang, Christopher M. Colorado, on the brief); Anita B. Weinstein, Cozen O'Connor, New York, New York (Kenneth G. Schwarz, on the brief), for Defendants-Cross-Defendants-Appellees.

Stephen P. Schreckinger, Gogick, Byrne & O'Neill, L.L.P., New York, New York, for Defendant-Cross-Defendant-Third Party-Defendant-Appellee.

Author of Opinion: Judge Pooler (majority); Judge Wesley (dissent).

Case Alert Circuit Supervisor: Elyse Diamond Moskowitz

    Posted By: Elyse Diamond @ 12/04/2013 09:42 PM     2nd Circuit  

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