$716M WTC Settlement For 1st Responders, Rubble Removal Workers Approved

NEW YORK - (Mealey's) U.S. Judge Alvin K. Hellerstein of the Southern District of New York on June 23, 2010 approved a $716 million settlement for first responders and workers who cleared the rubble of the collapsed World Trade Center towers after the Sept. 11, 2001, attack; a case management hearing is scheduled for tomorrow to address those claimants who are not party to the settlement (In re:  World Trade Center Disaster Site Litigation, Nos. 21-100, 21-102, 21-103, S.D. N.Y.).

The settlement process was amended because Judge Hellerstein had rejected a $657 million agreement announced March 11 by the parties.

"The Amended Settlement Process is fair, reasonable, adequate, just and in the best interest of the parties," according to Judge Hellerstein.

The settlement process given final approval on June 23 provides approximately $125 million more in compensation for the claimants than the original agreement, according to Judge Hellerstein.  The settlement fund is increased by an additional $50 million to $55 million from the WTC Captive Insurance Co. Inc, according to Judge Hellerstein.  In addition, New York and its workers' compensation insurance provider agreed to waive approximately $25 million in workers' compensation liens.  Counsel for the plaintiffs agreed to reduce their fees to 25 percent from 33 percent in the original agreement.

In addition, Judge Hellerstein approved the appointment of Matthew L. Garretson of the Garretson Firm Resolution Group in Cincinnati as the so-called allocation neutral.  Garretson will determine the entitlements of each claimant under the agreement.

Judge Hellerstein approved the appointment of Kenneth R. Feinberg of Feinberg Rozen in New York as claims appeals neutral.  Feinberg will hear appeals of the allocation neutral's determinations.

Roy D. Simon of Hofstra University School of Law in Hempstead, N.Y., was approved to review communications to the plaintiffs about the settlement process. 

The agreement applies to three related dockets for claimants who were among the first responders, claimants who worked on the rubble pile and claimants who allege injuries as first responders and for working to remove the rubble.  Ninety-five percent of the eligible claimants must agree to participate in the settlement or it will not become effective.

The settlement fund will be drawn from WTC Captive, which was created in 2004 with a $1 billion grant from the Federal Emergency Management Agency from an appropriation in 2003 by Congress.

The parties agree that within 90 days of the effective date of the settlement, WTC Captive will deposit $625 million in an account for the settlement fund.  In addition, WTC Captive will pay $3.5 million toward allocation costs.  WTC Captive may have an additional liability up to $25 million depending on the number of additional debris-removal claims filed.

The 21 MC 100 docket for first responders will receive $514.8 million.  The 21 MC 102 docket for those who worked removing the rubble pile at the site will receive $6.1 million.  The 21 MC 103 docket for claimants with alleged injuries as a first responder and working on the rubble pile will receive $18.1 million.  The permanent disability fund will receive $62.5 million.  The cancer insurance policy fund will receive $23.4 million.

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