If public officials engage a company to help in an emergency, do immunity protections covering these officials extend to the company? A federal judge, looking at the World Trade Center aftermath, said in effect, "It depends."
For it was only a matter of time until this question would be addressed for World Trade Center rescue and recovery workers. Someone was inevitably going to bring a liability suit about diseases acquired.
Since the asbestos litigation starting in the 1970s, courts have held that the exclusive remedy doctrine of workers' compensation could be relaxed in instances if negligence or fraud could be demonstrated.
New York City, contractors, and FEMA had readied themselves for it. They began in late 2001 to organize a special insurance vehicle to cover liability exposure. The WTC Captive Insurance Co. was launched in 2004, after several years of planning, with equity of $1 billion contributed by FEMA.
On Sept. 10, 2004, the law firms of Worby, Groner, Edelman and Napoli Bern filed a mass tort action suit in federal court against the city and contractors for negligence in protecting the health of workers at ground zero.
The filing of the suit coincided with the release of Mt. Sinai Medical Center's first report on rescue and recovery worker health problems. That report noted pulmonary and psychological problems among about 1,000 workers.
Plaintiffs sought damages for personal injuries, medical expenses and related damages as a result of exposures workers suffered while working at ground zero from Sept. 11 through "many months" thereafter.
Judge Alvin Hellerstein subsequently consolidated many suits, of which Worby's had the most claimants. As of late 2006 Hellerstein noted there were 3,000 claimants, but the number has certainly grown since. The consolidated case is called in re World Trade Center Disaster Litigation.
On Oct. 16, 2006, the judge said that the consolidated case would go forward despite immunity defenses. His ruling came just a month after the second Mt. Sinai report, which documented extensive pulmonary problems among a sample of about 9,000 workers.
In Hellerstein's words, the plaintiffs alleged that "The city and its contractors, and other defendants, were negligent in monitoring the air and assuring appropriate safety in the workplace, particularly in not providing adequate respiratory equipment and assuring proper use thereof."
He removed Con Ed, the utility company, and the Silverstein Properties, the lessee of the twin towers, from the lawsuit because they were barred access to their properties during the initial phases of rescue and recovery, and thus could not be held accountable for harm sustained by workers there.
The judge tried without success to isolate a period in which federal and state immunity provisions could remain intact. He expressed frustration at not finding a "bright-line demarcation between that which is emergent and that which is done in the more normal course of events."
He had originally sought to create a two-week window--from Sept. 11 to Sept. 29--within which immunity provisions would bar liability suits. An appellate court had overruled him.
Hellerstein then decided that federal immunity provisions do not protect the city and contractors simply because they had received federal funding.
Federal law provides for immunity against negligence suits arising out of emergency responses. This immunity extends to its contractors. However, Hellerstein ruled that federal law did not apply because city officials were in control of ground zero.
OSHA's role, for example, was one of "assistance and consultation, not enforcement." He contrasted that with the situation at the dumping ground in Staten Island, N.Y., under the direct control of the Army Corps of Engineers.
He noted further that Washington had contemplated liability suits in the law it quickly enacted in 2001 to limit the legal exposure of airlines, and in its funding of a liability insurance captive.
Subsequent to the October 2006 ruling, Hellerstein eventually dropped the idea of capping awards at $1 billion, the amount with which congress funded the captive to pay for these claims.
After addressing federal immunity, Hellerstein took on state laws which, on their surface, would appear to severely limit the exposure of state and local governments and their agents. Here, too, the judge ruled in favor of the plaintiffs.
New York state has several emergency laws going back to civil defense legislation passed in 1951. They provide for immunity for discretionary actions performed by governmental agencies and, perhaps, their contractors. State court decisions had upheld immunity when a party was acting in good faith in an urgent call for essential services such as public safety.An example is when a police car rams another vehicle while responding to a call for help.
But Hellerstein questioned whether the immunity provision allowed the "wholesale grant of immunity to incidents of negligence that occurred ... over a period of several months."
He remarked on the broad discretion of the city and its contractors in setting and enforcing work safety standards and noted the low rate of compliance with personal protective equipment.
The suit, he concluded, would go forward. "Whether plaintiffs will be able to make a showing of bad faith (by the defendants) is a question of fact for the jury that may not be summarily determined at this stage in the litigation."
He wrote, "Immunity provisions are to be interpreted narrowly. Our system of justice is premised on accountability, save for specific exceptions based on statute or fundamental common law principles of necessity. Defendants urge that courts should encourage actors to enlist in recovery efforts from mass disasters, but the same policy has to be sensitive to the individual workers who risk their lives."
The defendants, led by the captive, have appealed Hellerstein's ruling. Meanwhile New York City Mayor Michael Bloomberg has proposed that the city shift the one billion dollars used to fund the captive over to medical monitoring and care of affected workers and residents.
PETER ROUSMANIERE, a Vermont-based consultant and writer, is the workers' comp columnist for Risk & Insurance®.
STEVE YAHN contributed to this story.
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October 1, 2007
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