Financial services firm Cantor Fitzgerald, which saw 658 of its 1,000 employees killed in the Sept. 11 attacks, has nearly completed a settlement with American Airlines and insurance carriers, according to documents filed in federal court.
A final signed agreement may be ready by Tuesday, Cantor Fitzgerald attorney John Stoviak told Judge Alvin Hellerstein in a Thursday proceeding.
Stoviak told the judge the amount of the agreement will be made public after court approval, expected next year. Cantor originally sued for more than $1 billion in damages after the 2001 attacks, in which hijacked airliners crashed into the World Trade Center’s twin towers.
Cantor Fitzgerald’s headquarters were on the top floors of the north tower, which was struck by American Airlines Flight 11. The firm accused American of negligence in allowing hijackers to board the plane and crash it into the tower. American responded that it couldn’t have predicted such an attack and that it followed federal security regulations.
An attorney for the Fort Worth, Texas.-based American Airlines, which is part of American Airlines Group Inc., told the judge about 40 insurance carriers worldwide must agree to let him sign the deal. The insurance carriers’ money is in escrow, lawyer Desmond Barry said.
American spokesman Sean Collins said Friday that the airline’s insurers had agreed to settle the claims but the airline didn’t admit liability.
“American Airlines and the courageous crew members and passengers on Flight 77 and Flight 11 were all victims of the terrorist attacks of Sept. 11, 2001,” Collins said in an emailed statement.
He said American defended itself against claims by property owners and others who believe that “American should have done what the government could not do – prevent the terrorist attacks.”
A spokesman for Cantor Fitzgerald declined to comment.
New York Times reporter Benjamin Weiser joins Here & Now’s Jeremy Hobson to discuss the settlement.
- Benjamin Weiser, reporter for the New York Times.
JEREMY HOBSON, HOST:
This is HERE AND NOW.
American Airlines has agreed to a settlement with Cantor Fitzgerald. That's the New York financial firm that had accused American Airlines of failing to prevent the hijacking of Flight 11, which crashed into the north tower of the World Trade Center in New York on September 11, 2001. We don't know the details of the settlement, but at one point the suit had sought in the neighborhood of a billion dollars.
Cantor Fitzgerald lost 658 employees on 9/11. Its headquarters were located on the top two floors of the World Trade Center's north tower. The company's CEO, Howard Lutnick, lost his own brother in the attacks. Here he is speaking to ABC shortly after 9/11.
(SOUNDBITE OF TV SHOW, "INSIDE THE NEWSROOM")
HOWARD LUTNICK: I think we're all pulling together with a view that we want to make things happen for them. We need to figure out how to take care of them and give them more. It's going to be a different kind of drive that I've ever had before.
HOBSON: Benjamin Weiser has been covering the lawsuit from Cantor Fitzgerald for the New York Times and he's with us now. Ben, thanks for being here.
BENJAMIN WEISER: Thank you, Jeremy.
HOBSON: Well, this was filed almost 10 years ago. What exactly were the accusations that were being made against American Airlines?
WEISER: This was a negligence lawsuit. It alleged like others have as well that American had been negligent in allowing the hijackers to board the plane that eventually hit the north tower of the Trade Center and of course killed so many people, including so many Cantor Fitzgerald employees. The airline alleged - the airline, in defending itself, said that, you know, it had done everything that it should as an airline.
It said that it denied liability and said that it had no basis to foresee that any such attack would ever have occurred and that it had adhered to federal aviation, you know, security regulations and also those adopted by the carrier.
HOBSON: Well, and American Airlines wasn't handling security. This plane left from Boston Logan Airport. This was, of course, in the pre-9/11 days, so I guess it was on 9/11, so it was pre-TSA, which was created after 9/11. But it wouldn't have been American Airlines handling the security at Logan Airport anyway, right?
WEISER: Well, that's right. But the aviation industry hired security firms at Logan and other airports to handle that - those checkpoints that existed in that form before 9/11. That's right. In this particular lawsuit, only American was being sued, was being named. But, of course, you know, there have been a large number of such lawsuits by companies, by families of about 90 to 100 individuals who lost their lives in 9/11 and decided to sue. And they essentially sued the aviation industry. That included the airlines, the security companies and other defendants.
HOBSON: Because, of course, two of the airlines were from American, two of them were from United as well. What did...
WEISER: That's right.
HOBSON: And Cantor Fitzgerald was not seeking damages for the loss of life that happened. This was for business interruption.
WEISER: It was a very interesting question. Cantor sued - that's right - alleging property losses, but most importantly business interruption loses. You know, its lawyer said that their profits had essentially ended when the tower went down. One of their experts said that, you know, they had - their business was based on their exceptionally talented and liberally compensated brokers, as this expert put it, whose deaths severely impacted the dominance enjoyed by the firm.
But a judge ruled that ultimately they could only sue for the business losses, not for the profits that might have been generated by their employees. And thus Cantor had to adjust its demands. Originally it was seeking close to $1.1 billion. I believe now it's seeking somewhere in the neighborhood of four to five hundred million dollars. We'll find out sometime what that settlement is. It will be revealed. And we'll see where it ended up.
HOBSON: Is there a precedent for this type of lawsuit against an airline that gets involved in a crash or that, in this case, has a hijacker?
WEISER: You know, very few of these cases go to trial. The 9/11 context, there have been many such suits. As I mentioned, you know, Congress created a fund for families and victims, and thousands of them avail themselves of that fund and could avoid litigation. Roughly 90 families decided to sue. All of those cases were settled. And with this case settling, there won't be a test, so to speak, of the claim of negligence.
Obviously a settlement means no one admits any fault. And therefore with the case not going to trial, assuming that's what happens, we'll never sort of get to know whether this question of airline culpability, you know, was real or not, and what a jury might have thought.
HOBSON: Another businessman who lost a lot in 9/11 would be Larry Silverstein, the real estate developer who had leased the skyscrapers about two months before they were destroyed, and he could not, a judge said, seek additional money from American Airlines' parent company or United because he was already collecting billions of dollars from insurers, and the judge said this - which, by the way, is the same judge that's overseeing this case - said he couldn't collect twice under New York law.
WEISER: Judge Hellerstein - that's correct - dismissed the claim by World Trade Center Properties on grounds that their insurance coverage has exceeded their loses. But that is under appeal. So we'll have to see where that goes.
HOBSON: And Cantor Fitzgerald also sued Saudi Arabia back in 2004 contending that the government there helped finance al-Qaida. What's going on with that suit?
WEISER: That's a good question. Howard Lutnick actually spoke about that about 10 years ago when he sued. And, you know, he said, we wanted to hold people accountable. And in this suit, he and other plaintiffs as well, many of the victims, many of his former employees, different groups of plaintiffs sued a variety of defendants, including members of the Saudi Royal Family, charities, individuals allegedly associated with terrorism - all for what the suit alleged was support, material support, primarily through financial support of terrorists.
The Saudi families' members, I believe, have been dismissed from that case. But there still are charities and individuals pending as defendants. The case - that case has gone on for more than a decade as well, and it's unclear where that will go.
HOBSON: Ben, just put this in the context of all of the litigation that's going on when it comes to 9/11 still, and here we are 12 years after the attack. How much is there left to be litigated?
WEISER: Well, we're just about at the end now. The Silverstein appeal, of course, is pending. In theory, that could be sent back to a lower court. The Cantor case will be presumably settled sometime formally in the next month or so. I think that has brought to an end most of the, certainly, most of the aviation suits, the suits against the American aviation industry, the security companies, et cetera.
There still, of course, is this pending lawsuit against the foreign defendants. You know, it's unclear where that will go. But I think now more than a decade after those attacks, these suits may be coming finally to an end. And again, all through settlement at this point.
HOBSON: Benjamin Weiser of the New York Times reporting on a settlement that has been agreed to between American Airlines and the firm Cantor Fitzgerald which lost 658 employees who were working in the top two floors of the World Trade Center's North Tower on 9/11. Ben, thank you so much for joining us.
WEISER: Thank you very much.
HOBSON: This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.