9/11 Transparency Muzzled

Bruce Golding of the New York Post has done a good job of reporting on the 9/11 property damage litigation, with the exception of addressing the issue of transparency, or more correctly, the lack thereof.

On July 1, 2010 Judge Alvin K. Hellerstein issued an order granting a joint motion approving property damage settlements in 18 of 21 cases asserting property damage claims from the September 11, 2001 attack. The proposed amount , $1.2 billion, represents a 72% discount from the settling plaintiffs' total claimed damages of $4.4 billion.

The payouts are on hold pending a legal challenge by developer Larry Silverstein who's seeking $12 billion for his WTC losses. He didn't join in the settlement, which he said was "shrouded in secrecy" and involved "collusive" deals struck by insurers with interests on both sides of the table.

In a separate order, signed by Judge Hellerstein on the same day, he resolved the intervenor's motion to unseal documents. The New York Times had moved to unseal, and thereby make public, the motion filed to approve the property settlement.

The aviation defendants, including United Air Lines, American Airlines and the Massachusetts Port Authority, wanted the settlement to remain sealed. They argued that the sheer size of the settlement would cause the public to believe that they were at fault for the damage caused by the terrorists on 9/11. Basically, they were concerned that the amount of the settlement and its allocation among their insurers would reflect their culpability for the September 11 attacks.

Judge Hellerstein ruled that the New York Times motion would only be granted in part, and denied in part. The aggregate amount of the settlement and its allocation among contributing insurers would be disclosed to the public. But, the allocation of settlement proceeds among the settling plaintiffs, as well as confidential documents exchanged in the course of damages discovery, settlement negotiations and mediation would remain under seal. So much for openess and transparency!

Perhaps Mr. Silverstein's appeal will shed more light on this issue. Maybe a little sunshine will illuminate the allegations of secrecy and collusiveness. Time will tell, but Judge Hellerstein's record to date in the property and wrongful death cases certainly doesn't support openess. So, we'll all have to see what the good judge does next. He has said that he favors open records and accountability. Let's see if his actions match his words.