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Over the years, Clifford has worked out a system for dealing with big, sprawling tort cases. He persuades his fellow plaintiff lawyers to agree to a bottom line—the minimum amounts their clients will accept. Then he shares those amounts with the mediator. “There comes a time when you have to stop the bluff because there’s always bluffing in negotiation,” explains Clifford. He says as much to the opposing lawyers. “If that number is too much,” he tells them, “we’ll break this off and we’ll get going on with a trial.”
Clifford presented that number to the defense going into the mediation process. (Under a confidentiality agreement between the parties, he can’t say what the number was, though the plaintiffs had originally sought more than $6 billion total in damages.) The defense responded with a much lower number. Then, with the liability issues put aside, the lawyers and their clients began the nitty-gritty of settling on the damages—accounting for everything from the fair market values of the destroyed buildings to the business interruption claims and the replacement values of thousands of smaller items, such as office desks and chairs.
Over stretches of several days in November and December 2009, the lawyers and top company executives from both sides met for intensive mediation sessions. As the talks proceeded, the discussions grew more technical and obscure—if also more tenuous. “An hour before it settled, I thought it would fall apart,” recalls Martin, the mediator. But after seven long sessions, the parties finally had an agreement in principle in early January 2010, which became a done deal in March. For $1.2 billion—and no admissions of liability by the defendants—case closed. The specific amounts awarded to each of the insurers—not to mention the fees for Clifford and the other plaintiff attorneys—remain under seal. “Ultimately, I gave them a number as a recommendation and they accepted it,” says Martin. “They split the baby.”
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With settlements in the subrogation case, as well as in the mass claim filed by thousands of ground zero workers, and in all but one of the 95 civil wrongful death suits, the seemingly endless civil litigation stemming from the 9/11 attacks finally appears to be nearing an end. (The final holdout in the wrongful death cases is the family of Mark Bavis, a passenger on the second plane to strike the World Trade Center. Bavis’s family has sued United Airlines and Boeing, the plane’s manufacturer, as well as the security firm that ran the checkpoints at Logan Airport in Boston, where the flight originated. The trial is scheduled for June 13th in New York.)
Clifford, meanwhile, has yet to collect his substantial fee and probably won’t for a while. Larry Silverstein is contesting the proposed settlement, arguing that his company—not the insurers—is entitled to what’s left of the insurance proceeds. Lawyers for Silverstein failed to get Judge Hellerstein to reconsider the settlement, and the matter is now before the Second Circuit Court of Appeals, which is likely to hand down a ruling this spring. (Both sides of the subrogation case predict that the appeals court will reject Silverstein’s argument.)
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Today, Clifford acknowledges that his 9/11 case didn’t radically break new legal ground. “In the most cynical sense, these were just a bunch of insurance companies trading dollars,” he says, seated in a comfortable armchair in his Loop office, a spacious 31st-floor suite with nice views of Chicago’s skyline and the lake. The litigation was remarkable, Clifford says, mainly because it was 9/11: “The emotion that surrounds this case has just been staggering.”
Still, he argues that the lawsuit gave the airlines an incentive to aggressively address the problem of security, even though the lion’s share of airport security is now handled by the federal government’s Transportation Security Administration. “Without these 9/11 cases pushing the corporate entities to do a better job, I’m just not persuaded that they would.”
Not surprisingly, the defense sees things differently: The case was nothing more than a family squabble among insurers, and the decision to settle came down to strictly brass-tacks business, not the legal arguments. Explains the defense attorney quoted earlier: “The insurance underwriters decided, ‘Hey, we’re taking a lot of our money out of one of our pockets and putting it in the other and paying a lot of legal fees. Let’s see if we can settle this.’” The plaintiffs, he says, had initially sought more than $6 billion in damages. The defense team calculated that the other side could realistically put up a claim for maybe $4 billion. In the end, the parties settled for $1.2 billion—“about 25 cents on the dollar”—with no trial.
Still, it was a tough pill for the defendants to swallow. In an e-mail, a spokesman for American Airlines wrote: “Our insurers have agreed to settle the claims. American Airlines strongly disagrees with this decision, but our insurers have made the business decision to settle over American’s objections.” A spokeswoman for United Airlines echoed that stance.
Though clearly important to him, the 9/11 case, Clifford says, amounts to just another chapter in his long and varied career—not its capstone. “I’m not done,” he says. “I don’t want to say it’s the most important case of my career. That case is coming.”
3 days ago