World Trade Center Properties LLC v. American Airlines, No. 13-3619 (2d Cir. 2015)Annotate this Case
Plaintiffs filed suit against a group of airlines and security contractors seeking to recover losses after the September 11, 2001 terrorist attacks. Plaintiffs alleged that, because defendants were negligent in overseeing airport security systems, the terrorists were able to hijack American Airlines Flight 11 and United Airlines Flight 175 and to fly those planes into the Twin Towers. The district court entered judgment for defendants. The court agreed with the district court's conclusion that plaintiffs are entitled to compensation only for the amount of value that their leasehold interests lost due to the terrorist attacks, that they cannot recover their claimed consequential damages, and that, pursuant to CPLR 4545, their insurance recoveries correspond to, and offset, their potential tort award. The court also agreed that United had no duty to supervise the security checkpoints or detect the hijackers who boarded American Airlines Flight 11. However, the court concluded that the district court erred by using an incorrect methodology when calculating the value by which plaintiffs’ leasehold interests declined, and the district court wrongly decided that prejudgment interest accrues at the federal funds rate on the diminution in value of plaintiffs’ leasehold estates. The district court should have calculated prejudgment interest using New York’s statutory prejudgment interest rate, and assessed that interest based on the final damages award. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings.