City appeals judge’s stay of $657M deal for ill 9/11 workers

By Ari Paul

Lawyers for the city are appealing U.S. District Judge Alvin K. Hellerstein’s stay of a settlement between the city and more than 10,000 response workers suffering 9/11-related illness on grounds that the Judge overstepped his authority.

It also asked Judge Hellerstein to stall all proceedings in the litigation in order for the appeal to go forward.

Last month, Judge Hellerstein rejected the $657-million mass tort settlement because after lawyers’ fees of 33 percent were deducted the average pay-out per claimant—roughly $40,000 —would be too small a sum given the severity of the illness involved. Judge Hellerstein was unmoved during a hearing April 12 when lawyers asked him to lift the stay.

City: Judge Blocking Fair Deal

“In this case, the parties have tried to address concerns that were raised but the Judge’s statements and actions, together with his refusal to even consider other viewpoints, have made it necessary to appeal his rulings so that the plaintiffs and defendants can proceed with a settlement they consider fair and reasonable,” Corporation Counsel Michael A. Cardozo said in a statement. “Without this, we will not be able to obtain a settlement that provides compensation, certainty and closure to the parties after years of litigation.”

Legal experts have noted that while Judges have the power to reject settlements in class-action suits, Judge Hellerstein was entering untested territory in stepping into a mass-tort settlement (while the more-than 10,000 cases are grouped together, they do not constitute a “class” in the legal sense).

James E. Tyrrell, Jr., one of the main lawyers for the city and its contractors, said in statement, “While we respect the Judge’s views, his orders are impeding the progress we have made and are destroying the ability to provide compensation now to deserving plaintiffs through a settlement process. We also believe this settlement provides a pathway to obtain additional compensation from other parties who have not joined the settlement.”

In an interview with the New York Times, lead plaintiff attorney Marc Jay Bern did not indicate whether he would also file an appeal, saying, “As far as we’re concerned, the settlement still exists, and ultimately this is for our individual clients to accept or reject on their own behalf.”