10-2970-cv(L)

10-2970-cv(L)
In re: Sept. 11 Prop. Damage Litig.
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
3
August Term 2010 4
5
6
(Argued: March 10, 2011 Decided: April 8, 2011) 7
8
Docket Nos. 10-2970-cv(L), 10-3128-cv(CON), 10-3131-cv(CON), 9
10-3133-cv(CON), 10-3135-cv(CON), 10-3136-cv(CON), 10-3137-cv(CON), 10
10-3139-cv(CON), 10-3140-cv(CON), 10-3141-cv(CON), 10-3143-cv(CON), 11
10-3144-cv(CON), 10-3145-cv(CON), 10-3148-cv(CON), 10-3153-cv(CON), 12
10-3157-cv(CON), 10-3159-cv(CON), 10-3178-cv(CON), 10-3180-cv(CON) 13
14
_____________________________________ 15
16
I N RE : SEPTEMBER 11 17
PROPERTY DAMAGE LITIGATION 18
_____________________________________ 19
20
W ORLD TRADE C ENTER PROPERTIES LLC; 1 W ORLD TRADE C ENTER LLC; 2 21
W ORLD TRADE C ENTER LLC; 3 W ORLD TRADE C ENTER LLC; 4 W ORLD TRADE 22
C ENTER LLC; 7 W ORLD TRADE C OMPANY , L.P., 23
24
Intervenors-Appellants, 25
26
-v.- 27
28
C ERTAIN UNDERWRITERS AT LLOYD ’S OF LONDON C OMPRISING SYNDICATES NO . 29
33, 1003, 2003, 1208, 1243, 0376; GREAT LAKES R EINSURANCE (UK), PLC; 30
UNDERWRITER AT LLOYD ’S , SYNDICATE NO . 1225; M UNICH-A MERICAN R ISK 31
PARTNERS 7244 GMB H; GREATER NEW YORK M UTUAL I NSURANCE C OMPANY ; 32
I NSURANCE C OMPANY OF GREATER NEW YORK ; M UNICH R EINSURANCE C OM- 33
PANY UK GENERAL B RANCH; M UENCHENER R UECKVERSICHERUNES - 34
GESELLSCHAFT; W OBURN I NSURANCE , LTD .; GREAT LAKES R EINSURANCE U.K. 35
PLC; A MERICAN A LTERNATIVE I NSURANCE C ORPORATION ; THE PRINCETON 36
E XCESS & SURPLUS LINES I NSURANCE C OMPANY ; M UNICH R EINSURANCE 37
A MERICA , I NC ., FORMERLY KNOWN AS A MERICAN R E -I NSURANCE C OMPANY ; 38
C OLISEE R E , FORMERLY KNOWN AS AXA R E AND SUCCESSOR TO THE INTERESTS 39

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2
AND LIABILITIES OF SPS R EASSURANCE ; C OLISEE R E C ANADIAN B RANCH, 1
FORMERLY KNOWN AS AXA R E C ANADIAN B RANCH AND FORMERLY KNOWN AS 2
AXA C ORPORATE SOLUTIONS R EASSURANCE C ANADIAN B RANCH; C OLISEE R E 3
M ADEIRA B RANCH, FORMERLY KNOWN AS A XA R E M ADEIRA B RANCH; PORTMAN 4
I NSURANCE LIMITED , FORMERLY KNOWN AS AXA GLOBAL R ISKS (UK) LTD . AND 5
SUCCESSOR TO THE INTERESTS AND LIABILITIES OF A XA R EINSURANCE UK PLC ; 6
AXA C ORPORATE SOLUTIONS A SSURANCE UK B RANCH; AXA I NSURANCE 7
C OMPANY , FORMERLY AXA CS I NSURANCE C O .; C OLISEUM R EINSURANCE 8
C OMPANY , FORMERLY AXA CS R EINSURANCE C O . US; AXA V ERSICHERUNG AG; 9
AXA C ESSIONS ; AXA C ORPORATE SOLUTIONS SERVICES UK LTD . AND AXA 10
C ORPORATE SOLUTIONS A SSURANCE , FOR ITSELF AND SUCCESSOR TO THE 11
INTERESTS AND LIABILITIES OF AXA C ORPORATE SOLUTIONS A SSURANCE 12
C ANADIAN B RANCH; AXA A RT I NSURANCE C ORPORATION ; PARIS R E A SIA 13
PACIFIC PTE . LTD ., FORMERLY KNOWN AS AXA R E A SIA PACIFIC PTE . LTD .; PARIS 14
R E , SUCCESSOR TO THE INTERESTS AND LIABILITIES OF C OMPAGNIE GENERALE 15
DE R EASSURANCE DE M ONTE C ARLO ; I NDUSTRIAL R ISK I NSURERS AND ITS 16
MEMBERS; A EGIS I NSURANCE SERVICES , I NC .; LIBERTY I NSURANCE UNDERWRIT- 17
ERS , I NC .; NATIONAL UNION I NSURANCE C OMPANY OF PITTSBURGH; NUCLEAR 18
E LECTRIC I NSURANCE LIMITED ; C ERTAIN UNDERWRITERS AT LLOYD ’S C OMPRIS - 19
ING SYNDICATES NO . 1225 AND 1511; C ONSOLIDATED E DISON C OMPANY OF NEW 20
YORK , I NC .; QBE I NTERNATIONAL I NSURANCE LTD .; C ERTAIN UNDERWRITERS AT 21
LLOYD ’S LONDON, AS MEMBERS OF SYNDICATES NUMBERED 1212, 1241, 79, 506, 22
AND 2791; A SSURANCES GENERALES DE FRANCE I ART; A SSURANCES GENERALES 23
DE FRANCE ; A LLIANZ GLOBAL R ISKS US I NSURANCE C OMPANY F/K/A A LLIANZ 24
I NSURANCE C OMPANY ; A LLIANZ I NSURANCE C OMPANY OF C ANADA ; A LLIANZ 25
SUISSE V ERSICHERUNGS -GESELLSCHAFT; A LLIANZ V ERSICHERUNGS - 26
A KTIENGESELLSCHAFT; FIREMAN’S FUND I NSURANCE C OMPANY ; M AYORE 27
E STATES, LLC; 80 LAFAYETTE A SSOCIATES, LLC; B ARCLEY DWYER C O ., I NC .; 28
KAROON C APITAL M ANAGEMENT, I NC .; N.S. W INDOWS LLC; TOWER C OMPUTER 29
SERVICES , I NC .; W ALL STREET R EALTY C APITAL, I NC .; W ORLD TRADE FARMERS 30
M ARKET, I NC .; A DEM A RICI; OMER I PEK ; MVN A SSOCIATES, I NC .; M ARSHA V AN 31
NAME ; DANIEL D’A QUILA ; FLOYD V AN NAME, 32
33
Plaintiffs-Appellees, 34
35
A MERICAN A IRLINES , I NC .; AMR C ORPORATION ; UNITED A IR LINES, I NC .; UAL 36
C ORPORATION ; US A IRWAYS, I NC .; US A IRWAYS GROUP, I NC .; C OLGAN A IR , I NC .; 37
GLOBE A VIATION SERVICES C ORPORATION ; GLOBE A IRPORT SECURITY SERVICES , 38
I NC .; H UNTLEIGH USA C ORPORATION ; ICTS I NTERNATIONAL N.V.; THE B OEING 39
C OMPANY ; M ASSACHUSETTS PORT A UTHORITY ; B URNS I NTERNATIONAL SECU - 40

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3
RITY SERVICES C OMPANY , LLC, FORMERLY KNOWN AS B URNS I NTERNATIONAL 1
SECURITY SERVICES C ORPORATION ; B URNS I NTERNATIONAL SERVICES C OM- 2
PANY , LLC, FORMERLY KNOWN AS B URNS I NTERNATIONAL SERVICES C ORPORA - 3
TION; PINKERTON’S LLC, FORMERLY KNOWN AS PINKERTON’S I NC .; 4
SECURITAS AB, 5
6
Defendants-Appellees. 7
8
_____________________________________ 9
10
Before: B.D. PARKER, LIVINGSTON, and LYNCH, Circuit Judges. 11
Intervenors-Appellants World Trade Center Properties LLC, 1 World 12
Trade Center LLC, 2 World Trade Center LLC, 3 World Trade Center LLC, 4 13
World Trade Center LLC, and 7 World Trade Company, L.P. (collectively “WTCP 14
Plaintiffs”) appeal from a final Order of the United States District Court for the 15
Southern District of New York (Alvin K. Hellerstein, District Judge) granting 16
Plaintiffs-Appellees’ (collectively “Settling Plaintiffs”) and Defendants-Appellees’ 17
(collectively “Aviation Defendants”) joint motion for orders approving their 18
Settlement Agreement and Mutual Release of Claims. We hold that the Air 19
Transportation Safety and System Stabilization Act of 2001 (“ATSSSA”), Pub. 20
L. No. 107-42, 115 Stat. 230 (2001) (codified as amended at 49 U.S.C. § 40101, 21
note), does not preempt New York State’s “first-come, first-served” settlement 22
rule, and that the proposed settlement payments reduce each contributing 23
Aviation Defendants’ remaining liability pursuant to the liability limits defined 24
in ATSSSA. We also conclude that the district court did not abuse its discretion 25

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4
in finding that the Settling Plaintiffs and Aviation Defendants entered into their 1
settlement agreement in good faith. Accordingly, we affirm the district court’s 2
approval of the settlement. 3
AFFIRMED. 4
5
C ATHI H ESSION (Richard Williamson, on the 6
brief), Flemming Zulack Williamson Zauderer 7
LLP, New York, New York, for Intervenors- 8
Appellants. 9
10
GREGORY P. JOSEPH (Douglas J. Pepe, on the 11
brief), Gregory P. Joseph Law Offices LLC, New 12
York, New York, for Plaintiffs-Appellees. 13
14
ROGER E. PODESTA, Debevoise and Plimpton LLP; 15
Desmond T. Barry, Jr., Condon & Forsyth LLP, 16
New York, New York, for Defendants-Appellees. 17
18
19
DEBRA A NN LIVINGSTON , Circuit Judge: 20
Intervenors-Appellants World Trade Center Properties LLC, 1 World 21
Trade Center LLC, 2 World Trade Center LLC, 3 World Trade Center LLC, 4 22
World Trade Center LLC, and 7 World Trade Company, L.P. (collectively “WTCP 23
Plaintiffs”) appeal from a final Order of the United States District Court for the 24
Southern District of New York (Alvin K. Hellerstein, District Judge) granting 25
Plaintiffs-Appellees’ (collectively “Settling Plaintiffs”) and Defendants-Appellees’ 26
(collectively “Aviation Defendants”) joint motion for orders approving their 27
Settlement Agreement and Mutual Release of Claims, dated February 23, 2010. 28

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5
The district court also ordered all amounts paid pursuant to the settlement 1
agreement to be credited to the contributing Aviation Defendants’ respective 2
liability ceilings under § 408(a)(1) of the Air Transportation Safety and System 3
Stabilization Act of 2001 (“ATSSSA”), Pub. L. No. 107-42, 115 Stat. 230 (2001) 4
(codified as amended at 49 U.S.C. § 40101, note). It further found that 5
Defendant-Appellee Huntleigh USA Corp.’s (“Huntleigh”) insurers will exhaust 6
the limits of Huntleigh’s liability insurance coverage by making payments 7
pursuant to the settlement agreement. 8
The WTCP Plaintiffs argue that the district court’s application of New 9
York state settlement rules was contrary to, and thus preempted by, ATSSSA. 10
They also contend that the court failed to make a proper evaluation of the 11
fairness of the settlement agreement, and that the court erred in crediting the 12
proposed settlement payments to the contributing Aviation Defendants’ 13
respective liability limits under ATSSSA. We hold that ATSSSA does not 14
preempt New York State’s “first-come, first-served” settlement rule, and that the 15
proposed settlement payments pursuant to the settlement agreement properly 16
reduce the contributing Aviation Defendants’ remaining liability under 17
ATSSSA’s liability limits. We further conclude that the district court did not 18
abuse its discretion in finding that the Settling Plaintiffs and Aviation 19
Defendants entered into their settlement in good faith. 20

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6
BACKGROUND 1
This case concerns the multitude of property damage claims that arose 2
from the terrorist attacks of September 11, 2001, when American Airlines Flight 3
11 and United Air Lines Flight 175 struck Towers One and Two of the World 4
Trade Center. Defendant-Appellee Globe Airport Security Services, Inc. 5
(“Globe”) provided security services for Defendant-Appellee American Airlines, 6
Inc. (“American”) and screened the passengers aboard Flight 11. Huntleigh 7
provided similar services for Defendant-Appellee United Air Lines, Inc. 8
(“United”), and screened the passengers aboard Flight 175. 9
Among the several groups of plaintiffs that filed suit against the Aviation 10
Defendants, the Settling Plaintiffs alleged subrogated and uninsured property 11
damage and business interruption claims. The WTCP Plaintiffs similarly 12
asserted claims, alleging, inter alia, that, but for the negligence of the Aviation 13
Defendants, the terrorists would not have boarded Flights 11 and 175, and the 14
WTCP Plaintiffs’ property would not have been destroyed. After a lengthy 15
period of discovery, the Settling Plaintiffs and Aviation Defendants entered into 16
a mediation process in which retired U.S. District Judge John S. Martin, Jr., 17
served as mediator. The WTCP Plaintiffs, however, did not participate after 18
Judge Martin concluded that their position was so far apart from that of the 19
Aviation Defendants that mediation efforts would be unproductive. 20

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1 Due to the great number of September 11 related lawsuits, the district
court consolidated these cases under four master case numbers, which separated
the cases by subject matter. In re Sept. 11 Litig., 567 F. Supp. 2d 611, 614 n.3
(S.D.N.Y. 2008). 21 MC 101 encompassed wrongful death, personal injury and
property damage lawsuits resulting from the terrorist attacks. Id.
7
Towards the end of the mediation proceedings between the Settling 1
Plaintiffs and the Aviation Defendants, which lasted two full weeks, Judge 2
Martin concluded that the two sides remained far apart. He proposed a 3
“mediator’s number” of $1.2 billion to settle all claims. The proposed amount, 4
which Judge Martin believed to represent a reasonable settlement of all of the 5
Settling Plaintiffs’ claims, reflected a 72 percent discount from the Settling 6
Plaintiffs’ total claimed damages of $4.4 billion, and was higher than the last 7
settlement offer by the Aviation Defendants. Both sides accepted Judge Martin’s 8
number and, on February 23, 2010, entered into their Settlement Agreement 9
and Mutual Release of Claims. 10
The settlement resolves 18 of the 21 property damage actions comprising 11
the master calendar for September 11 property damage claims, 21 MC 101.1
12
Under the terms of the agreement, four of the Aviation Defendants are to pay 13
the entire settlement amount of $1.2 billion. American and Globe will pay 60 14
percent of the settlement, for damages attributed to Flight 11, while United and 15
Huntleigh will pay the remaining 40 percent, for damages attributed to Flight 16
175. Because Huntleigh had a small amount of insurance relative to the other 17

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8
contributing Aviation Defendants, the agreement further provides that 1
Huntleigh will contribute, and thereby exhaust, its available insurance coverage. 2
In exchange, each Settling Plaintiff is to execute and deliver releases discharging 3
and releasing all Aviation Defendants, as well as the contributing Aviation 4
Defendants’ insurers, from all claims relating to or arising out of the September 5
11 attacks. The agreement is expressly conditioned, in relevant part, upon the 6
district court’s: 1) approving both the settlement and the allocation of payments 7
between the contributing Aviation Defendants as consistent with ATSSSA; 2) 8
concluding that all amounts paid pursuant to the settlement agreement are to 9
be credited against the contributing Aviation Defendants’ respective ATSSSA 10
liability limits; and 3) finding that Huntleigh exhausted its liability limits under 11
ATSSSA. 12
In an Opinion and Order dated July 1, 2010, the district court approved 13
the settlement agreement and ordered all amounts paid pursuant to the 14
settlement agreement to be credited against the liability ceilings of the 15
contributing Aviation Defendants. The court also concluded that payment by 16
Huntleigh’s insurers exhausted the limits of Huntleigh’s liability insurance 17
coverage. On July 23, 2010, the district court issued an order clarifying that its 18
Opinion and Order was final and appealable in each of the settled actions and 19
in the collective 21 MC 101 action. It also granted intervenor status in each of 20

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9
the settled actions to the WTCP Plaintiffs. The court directed entry of final 1
judgment pursuant to Fed. R. Civ. P. 54(b). Judgment was entered in the 2
collective 21 MC 101 action on July 23, 2010, and in each of the settled actions 3
on July 29, 2010. The WTCP Plaintiffs timely appealed from the collective 4
action on July 30, 2010, and from each settled action on August 9, 2010. 5
6
DISCUSSION 7
On appeal, the WTCP Plaintiffs contend that the district court erred in 8
three respects. First, the WTCP Plaintiffs argue that the district court’s 9
approval of the settlement pursuant to New York state law was contrary to 10
ATSSSA. Second, they argue that the district court failed to make a proper 11
evaluation of the settlement agreement and its fairness. Third, they contend 12
that the district court erred in crediting the settlement payments to the Aviation 13
Defendants’ ATSSSA liability limits because such payments were not based on 14
these defendants’ “liability.” 15
“Typically, settlement rests solely in the discretion of the parties, and the 16
judicial system plays no role.” In re Masters Mates & Pilots Pension Plan & 17
IRAP Litig., 957 F.2d 1020, 1025 (2d Cir. 1992); see also Fed. R. Civ. P. 18
41(a)(1)(A) (“[T]he plaintiff may dismiss an action without a court order by 19
filing . . . a stipulation of dismissal signed by all parties who have appeared.”). 20

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10
In some circumstances, however, “parties are unwilling to drop litigation unless 1
a court invokes its equitable powers to enforce their agreement.” In re Masters, 2
957 F.2d at 1025; see also Manual for Complex Litigation (Fourth) § 13.14 3
(2004). We generally review a district court’s approval of a settlement 4
agreement for abuse of discretion. See Neilson v. Colgate-Palmolive Co., 199 5
F.3d 642, 654 (2d Cir. 1999). We review a district court’s factual conclusions 6
under the “clearly erroneous” standard, and its legal conclusions de novo. See 7
Omega Eng’g, Inc. v. Omega, S.A., 432 F.3d 437, 443 (2d Cir. 2005). 8
9
I. Whether the District Court Properly Applied State Law to 10
Approve the Settlement Agreement 11
12
As the district court noted, under New York State law, an insurer has 13
discretion to settle whenever and with whomever it chooses, provided it does not 14
act in bad faith. See Allstate Ins. Co. v. Russell, 788 N.Y.S.2d 401, 402 (N.Y. 15
App. Div. 2d Dep’t 2004). This “‘first in time, first in right’ principle” applies 16
regardless of “whether the priority is by way of judgment or by way of settle- 17
ment.” David v. Bauman, 196 N.Y.S.2d 746, 748 (N.Y. Sup. Ct. 1960). The 18
WTCP Plaintiffs argue that the district court’s application of this “first-come, 19
first-served” settlement rule was contrary to, and therefore preempted by, 20
ATSSSA for two primary reasons. First, they contend that ATSSSA’s liability 21

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11
limits created a “limited fund,” from which they are entitled to a just and fair 1
distribution. Second, they argue that pursuant to ATSSSA’s provisions and its 2
overall statutory scheme, they are entitled to adequate compensation notwith- 3
standing the statute’s liability limitations. Relying on our prior decision in 4
Canada Life Assurance Co. v. Converium Rückversicherung (Deutschland) AG, 5
335 F.3d 52 (2d Cir. 2003), they assert that they are one of “those injured or 6
killed in the terrorist attacks,” to whom ATSSSA “ensur[ed] . . . adequate 7
compensation.” Id. at 55. The WTCP Plaintiffs’ contentions lack merit. 8
Section 408(b)(2) of ATSSSA provides that the substantive law for decision 9
in actions arising out of the September 11 terrorist attacks “shall be derived 10
from the law . . . of the State in which the crash occurred unless such law is 11
inconsistent with or preempted by Federal law.” ATSSSA § 408(b)(2). In 12
construing various provisions of ATSSSA, we have recognized that federal law 13
preempts state law pursuant to the Supremacy Clause, U.S. Const. art. VI, cl. 14
2, where, inter alia: 1) Congress preempts state law in express terms (and within 15
its constitutional limits); 2) state law “actually conflicts” with federal law; or 3) 16
state law “stands as an obstacle to the accomplishment and execution of the full 17
purposes and objectives of Congress.” In re WTC Disaster Site, 414 F.3d 352, 18
371-72 (2d Cir. 2005) (quoting Hillsborough Cnty. v. Automated Med. Labs., Inc., 19
471 U.S. 707, 713 (1985)). If, as here, a statute contains an express preemption 20

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12
clause, “‘the task of statutory construction must in the first instance focus on the 1
plain wording of the clause, which necessarily contains the best evidence of 2
Congress’ pre-emptive intent.’” Id. at 372 (quoting CSX Transp., Inc. v. 3
Easterwood, 507 U.S. 658, 664 (1993)). 4
A. Whether ATSSSA’s Liability Limits Create a “Limited Fund” 5
The WTCP Plaintiffs’ claim that ATSSSA created a “limited fund,” 6
preempting New York’s “first-come, first-served” settlement rule, is without 7
merit. In a section entitled “Limitation on liability,” ATSSSA specifies that 8
liability “for all claims, whether for compensatory or punitive damages or for 9
contribution or indemnity,” against the Aviation Defendants “shall not be in an 10
amount greater than the limits of liability insurance coverage maintained by” 11
the Aviation Defendants. ATSSSA § 408(a)(1). We have repeatedly made clear 12
that this provision – far from creating a fund for the payment of claims – instead 13
“caps tort liability stemming from the attacks at ‘the limits of the liability 14
insurance coverage maintained by the [Aviation Defendants].’” Schneider v. 15
Feinberg, 345 F.3d 135, 139 (2d Cir. 2003) (per curiam) (quoting ATSSSA 16
§ 408(a)); see also In re WTC Disaster Site, 414 F.3d at 373 (noting that a 17
“principal component[ ]” of ATSSSA was “the limitation of the airlines’ liability 18
for damages sustained as a result of those crashes” (emphasis added)); Canada 19
Life, 335 F.3d at 55 (noting that § 408(a) “limits the liability for the events of 20

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13
September 11” of the Aviation Defendants). A primary purpose of ATSSSA, as 1
we have noted, was to “preserve the continued viability of the United States air 2
transportation system from potentially ruinous tort liability in the wake of the 3
attacks.” Schneider, 345 F.3d at 139 (internal quotation marks omitted); see also 4
In re WTC Disaster Site, 414 F.3d at 377 (observing that a “principal goal[ ]” was 5
“to limit the liability of entities that were likely to be sued for injuries suffered 6
in connection with the crashes”); Canada Life, 335 F.3d at 55 (finding that a 7
“general purpose” of ATSSSA was “to protect the airline industry and other 8
potentially liable entities from financially fatal liabilities”). 9
Nothing in ATSSSA’s text suggests that Congress intended to create a 10
“limited fund” from which plaintiffs bringing a federal cause of action under 11
ATSSSA against the Aviation Defendants are entitled to an equitable share. To 12
the contrary, various provisions of the statute concern the administration of, and 13
eligibility regarding, a Victim Compensation Fund for individuals willing to 14
waive such a cause of action pursuant to § 408(b). See ATSSSA §§ 404-06. And 15
Congress provided explicitly for the treatment of certain other claims involving 16
other defendants, specifying, for instance, the funds from which debris removal 17
claims were to be paid, and the manner in which settlements or judgments were 18
to be treated. See ATSSSA § 408(a)(5) (“Payments to plaintiffs who obtain a 19
settlement or judgment with respect to a claim or action to which paragraph (4) 20

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14
[(debris removal actions)] applies, shall be paid solely from the following funds 1
in the following order.”). Had Congress intended to create a “limited fund” for 2
those plaintiffs pursuing an ATSSSA cause of action against the Aviation 3
Defendants, and to constrain the manner in which settlements could be made, 4
it would have done so in far more explicit terms. 5
B. Whether ATSSSA’s Purpose and Statutory Scheme Preempt New 6
York’s “First-Come, First-Served” Settlement Rule 7
8
The WTCP Plaintiffs next contend that this Court in Canada Life 9
concluded that Congress intended to ensure that ATSSSA’s liability limit 10
preserved the ability of any claimant to recover a damages award, requiring, 11
here, the preemption of New York’s “first-come, first served” settlement rule. We 12
disagree. Canada Life discussed Congress’s decision to require a single forum 13
for all actions, and found that the goal of requiring a single forum was to “ensure 14
consistency and efficiency in resolving the many expected actions arising from 15
the events of September 11.” 335 F.3d at 58. We acknowledged that Congress 16
sought to avoid the undesirable effects of litigation in multiple state and federal 17
fora, and noted that such effects “might include adjudications having a 18
preclusive effect on non-parties or substantially impairing or impeding non- 19
parties’ abilities to protect their rights.” Id. at 59 (emphasis added). This 20
discussion in Canada Life, however, referred solely to the purposes of ATSSSA’s 21

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15
exclusive venue provision. We never suggested there that ATSSSA pursued the 1
goal of avoiding preclusive effects by any means other than requiring an 2
exclusive forum. Canada Life therefore does not support the WTCP Plaintiffs’ 3
argument. 4
We conclude that New York’s “first-come, first-served” rule, as applied by 5
the district court, is neither inconsistent with ATSSSA, nor does it stand as an 6
obstacle to the accomplishment of Congress’s objectives in enacting ATSSSA. 7
Moreover, because neither ATSSSA nor other federal law controls the approval 8
of settlements in actions commenced under § 408(b)(1), state law settlement 9
rules apply to this case. See id. § 408(b)(2). The district court therefore properly 10
applied state law settlement rules to the settlement agreement. 11
12
II. Whether the District Court Failed to Make a Proper Evaluation of 13
the Settlement 14
15
The WTCP Plaintiffs next argue that the district court failed to make a 16
proper evaluation of the settlement and its relative fairness. Under New York 17
law, an insurer “has no duty to pay out claims ratably and/or consolidate them,” 18
so long as it does not act in bad faith. Allstate Ins. Co., 788 N.Y.S.2d at 402 19
(citing Duprey v. Sec. Mut. Cas. Co., 256 N.Y.S.2d 987, 989 (N.Y. App. Div. 3d 20
Dep’t 1965)). An insurer may therefore “settle with less than all of the claimants 21

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2 E.g., Travelers Indem. Co. v. Citgo Petroleum Corp., 166 F.3d 761, 764-65
(5th Cir. 1999); Hartford Cas. Ins. Co. v. Dodd, 416 F. Supp. 1216, 1219 (D. Md.
1976); Allstate Ins. Co. v. Evans, 409 S.E.2d 273, 274 (Ga. App. 1991); Alford v.
Textile Ins. Co., 103 S.E.2d 8, 13 (N.C. 1958); Bennett v. Conrady, 180 Kan. 485,
491 (1957).
3 Although they argued below that the settlement was the result of secrecy
and collusion, the WTCP Plaintiffs have not raised this argument on appeal. It
is therefore waived. See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998)
(“Issues not sufficiently argued in the briefs are considered waived and normally
will not be addressed on appeal.”).
16
under a particular policy even if such settlement exhausts the policy proceeds.” 1
STV Grp., Inc. v. Am. Cont’l Props., Inc., 650 N.Y.S.2d 204, 205 (N.Y. App. Div. 2
1st Dep’t 1996). Such settlements are not “voluntary” or “additional insurance,” 3
but rather “reduc[e] the liability remaining under the policy.” Duprey, 256 4
N.Y.S.2d at 989. This has long been the rule across several jurisdictions. 2 See 5
70 A.L.R.2d 416 § 2a (2008); 46A C.J.S. Insurance § 2318 (2010). 6
The WTCP Plaintiffs have presented no evidence of the bad faith 7
necessary to draw into question the settlement in this case.3 The settling 8
parties’ mediator, Judge Martin, attested that the settling parties “hotly 9
contested each other’s claims both as to legal liability and damages,” and that 10
they made detailed presentations on their differing positions. Decl. of John S. 11
Martin, Jr. ¶ 7. He has affirmed that there was no indication during the 12
mediation process that any of the parties softened its position on a proper 13
settlement for interests other than its own. Id. ¶ 8. Judge Martin has also 14

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17
stated that the settlement agreement was reached “only after extensive arms- 1
length and good-faith negotiations among the parties and was not intended to 2
prejudice the rights of any other party.” Id. ¶ 10. In addition, the $1.2 billion 3
settlement amount was proposed by Judge Martin, represented a 72 percent 4
discount from the Settling Plaintiffs’ total claimed damages of $4.4 billion, and 5
was higher than the last settlement offer by the Aviation Defendants. 6
The WTCP Plaintiffs argue that the settlement is improper because it is 7
a lump sum applicable to all of the Settling Plaintiffs’ claims, and is not based 8
on a claim-by-claim assessment of potential liability. Judge Martin explained, 9
however, that while the parties did spend a “substantial” amount of time 10
discussing damages on a claim-by-claim basis, none of these issues could be 11
resolved by the time mediation began. Id. ¶ 12. The settling parties decided 12
that the assessment of damages on an underlying claim-by-claim and defendant- 13
by-defendant basis “could not have been done in any reasonable amount of time 14
and without substantial cost.” Id. Instead, both parties independently 15
concluded that damages should be allocated approximately 60 percent to Flight 16
11, and 40 percent to Flight 175. The 60/40 allocation resulted from each 17
settling party deeming Flight 11 responsible for the destruction of Tower Seven 18
– an assessment of responsibility that the WTCP Plaintiffs themselves assert in 19
their complaint. 20

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18
The WTCP Plaintiffs also contend that the settlement is improper because 1
it releases all Aviation Defendants from liability when only four of them are 2
responsible for paying the settlement amount. However, the settling parties 3
articulated their reasons for limiting the settlement contributors to four of the 4
Aviation Defendants. The Aviation Defendants believed that adding other 5
defendants and insurers would increase plaintiffs’ settlement demands and 6
further complicate negotiations without reducing payment by the contributing 7
Aviation Defendants’ insurers. Further, they believed that the claims against 8
the other Aviation Defendants were weaker than those against the two airlines 9
and their checkpoint security companies. The Aviation Defendants were also 10
concerned about setting an undesirable precedent for future disasters if non- 11
carrier airlines (which might in the future include American and United) 12
contributed to the settlement. In addition, the Aviation Defendants contributing 13
to the settlement did not want to face potential indemnification claims by other 14
Aviation Defendants not released. Finally, the contributing Aviation Defen- 15
dants’ insurers sought to avoid the costs of continued discovery of their four 16
insureds if the other Aviation Defendants were not released. 17
In sum, we agree with the district court that the settling parties entered 18
into their settlement agreement in good faith. We therefore conclude that the 19
district court did not abuse its discretion in approving the settlement agreement. 20

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19
III. Whether the Proposed Settlement Payments Count Towards the 1
Aviation Defendants’ Liability Limits 2
3
The WTCP Plaintiffs finally argue that the district court erred in crediting 4
the settlement payments against the contributing Aviation Defendants’ 5
respective liability limits. They contend that ATSSSA’s limitation only applies 6
to payments for “liability,” and that the settlement payments here should not 7
count because they were not determined on the basis of the Aviation Defendants’ 8
liability. We are not persuaded. 9
When interpreting a statute, we must give terms their ordinary, common 10
meaning and read them in their appropriate context. See Bilski v. Kappos, 130 11
S. Ct. 3218, 3226 (2010) (“[I]n all statutory construction, unless otherwise 12
defined, words will be interpreted as taking their ordinary, contemporary, 13
common meaning.” (internal quotation marks and alteration omitted)); see also 14
Torraco v. Port Auth. of N.Y. & N.J., 615 F.3d 129, 142 (2d Cir. 2010) (“In the 15
usual case, if the words of a statute are unambiguous, judicial inquiry should 16
end, and the law is interpreted according to the plain meaning of its words.” 17
(internal quotation marks omitted)). The “meaning of a word [or phrase] cannot 18
be determined in isolation, but must be drawn from the context in which it is 19
used.” Strom v. Goldman, Sachs & Co., 202 F.3d 138, 146 (2d Cir. 1999) 20
(quoting Deal v. United States, 508 U.S. 129, 132 (1993)). 21

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20
ATSSSA states in relevant part, “liability for all claims . . . shall not be in 1
an amount greater than the limits of liability insurance coverage maintained by 2
[an Aviation Defendant].” ATSSSA § 408(a)(1) (emphasis added). “Liability,” 3
meanwhile, is defined as either: 1) “[t]he quality or state of being legally 4
obligated or accountable”; or 2) “[a] financial or pecuniary obligation.” Black’s 5
Law Dictionary 997 (9th ed. 2009). Here, reading the term in context, it is clear 6
that “liability” refers to a “financial or pecuniary obligation” that can arise 7
through the settlement of claims. This reading of “liability” in § 408(a)(1) 8
accords with the common understanding of “liability insurance,” which 9
commonly provides for an insured’s claim to arise “once the insured’s [legal 10
obligation] to a third party has been asserted.” Black’s Law Dictionary 873 (9th 11
ed. 2009) (emphasis added); see also 15 Holmes’ Appleman on Insurance § 111.1 12
(2d ed. 2000) (“[L]iability insurance protects the insured against damages which 13
he may be liable to pay to third parties arising out of the insured’s conduct.” 14
(emphasis added)). Settlements, in turn, “reduc[e] the liability remaining under 15
the policy.” Duprey, 256 N.Y.S.2d at 989 (emphasis added). 16
This reading also coheres with other provisions of ATSSSA Title IV – 17
namely § 408(a)(4), which uses similar language to limit the “liability” of certain 18
defendants for debris removal claims. While paragraph (4) specifies the limits 19
of “liability” for such entities, paragraph (5) specifies a priority of payments for 20

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21
plaintiffs who obtain “a settlement or judgment” with respect to “a claim or action 1
to which paragraph (4) applies.” ATSSSA § 408(a)(5) (emphasis added). If 2
“liability,” as used in § 408(a)(4), referred only to payments for legally 3
adjudicated obligations, paragraph (5) would be rendered meaningless, and the 4
word “settlement” reduced to surplusage, since there could be no 5
“settlement . . . to which paragraph (4) applies” under the WTCP Plaintiffs’ 6
reading. It thus makes better sense to read “liability” to include the settlement 7
payments made here. The district court therefore did not abuse its discretion or 8
commit an error of law in crediting the settlement payments against the 9
contributing Aviation Defendants’ limits of liability. 10
11
CONCLUSION 12
We have considered the parties’ remaining arguments and find them to be 13
moot or without merit. For the foregoing reasons, the judgment of the district 14
court is AFFIRMED. 15

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