American, United Face Trial Over 9-11 Towers Destruction

AMR Corp.’s (AAMRQ) American Airlines and United Continental Holdings Inc. (UAL) lost a bid to avoid a federal trial over negligence claims tied to the hijacking of jetliners used in the Sept. 11, 2001, terrorist attacks that killed about 3,000 people in New York, Washington and Pennsylvania.

World Trade Center Properties LLC, which owned the twin skyscrapers in lower Manhattan destroyed in the attacks, sued the airlines in 2008 alleging negligence against the carriers for allowing terrorists to board and hijack the planes that were flown into the buildings. U.S. District Judge Alvin Hellerstein in Manhattan yesterday said a trial is required.

On the day of the attacks, two planes were hijacked and flown into the World Trade Center. American Airlines Flight 11 crashed into the North Tower of the World Trade Center. Minutes later, United Airlines Flight 175 crashed into the South Tower.

After the attacks, the owners sued insurers, eventually settling for $4.09 billion, the judge said. World Trade Center Properties sued the airlines seeking $8.4 billion, or the estimated cost of replacing the two towers as well as claims of negligence, the judge said in yesterday’s ruling. Hellerstein said he previously rejected the airlines’ bid for summary judgment, or a ruling before trial.

Limited Recovery

Hellerstein also limited the owners’ recovery and determined its destroyed lease on the day of the terrorist attacks to be worth $2.805 billion, the price the World Trade Center Properties agreed to pay the Port Authority of New York and New Jersey for the lease a few months before the 2001 attacks, he said.

The judge yesterday rejected the air carriers’ argument that since the buildings’ owners recovered $4.09 billion from insurance, World Trade Center Properties couldn’t also recover the $2.8 billion sought for the lease.

“On this record, before trial, I am not able to make such findings,” Hellerstein said in his ruling.

Matt Miller, a spokesman for American, said the airline has no comment about the case.

Desmond Barry, a lawyer for the airlines, didn’t immediately return a voice-mail message left at his office seeking comment about the ruling.

The case is In Re September 11 Litigation, 21-MC-101, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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