On February 22, 2008, United States District Judge Barbara Jones granted motions for partial summary judgment in favor of STB client Swiss Re and other insurers in related suits against the Port Authority of New York and New Jersey arising from the September 11, 2001 terrorist attack on the World Trade Center.
Swiss Re underwrote approximately $350 million of the Port Authority's $1.5 billion standalone property insurance program. That program covered the Port Authority's entire portfolio of properties in the New York City area, including the Holland and Lincoln tunnels, the George Washington Bridge, JFK, LaGuardia and Newark airports, various PATH rail facilities, and all Port Authority property at the World Trade Center complex. The Port Authority's program was placed one month before the Port Authority leased a portion of the World Trade Center complex to entities controlled by developer Larry Silverstein. Silverstein separately insured the leased World Trade Center complex.
A year after Swiss Re prevailed in a trial against Silverstein capping at a single policy limit Swiss Re's liability for damage to the World Trade Center complex under the Silverstein program, the Port Authority advanced the position that its own insurance program simultaneously responded for property damage to the leased World Trade Center complex to the extent that Silverstein's insurance was insufficient to fund rebuilding. According to the Port Authority, that damage plus damage to other Port Authority property exhausted two full limits of the Port Authority's $1.5 billion coverage (like Silverstein, the Port Authority has also asserted a two occurrence claim under its insurance program). STB, on behalf of Swiss Re, brought suit against the Port Authority in 2005 seeking, among other things, a declaration that the leased World Trade Center complex was excluded from coverage under the Port Authority program. Other insurers likewise brought suit. Swiss Re moved for summary judgment that the Silverstein property was excluded. The Port Authority cross-moved. On Monday, Judge Jones ruled in Swiss Re's favor that the Silverstein property was excluded from coverage under the Port Authority insurance, which will have the effect of reducing the Port Authority's insurance claim by as much as $2 billion.
Simpson Thacher partners litigating the Port Authority matter include Barry Ostrager, Mary Kay Vyskocil, Michael Kibler, and Michael Garvey. Associates include Michael Ledley, Erika Burk, Sarah Dunn, Marsha Yee, Jason Rubin, Ted DeBonis, and Patrick Smith. Paralegals include Loretta Washienko, Alex Fiedler, Mitchell Birrittella, Sam Roberts, Jessica Kerr, and Robbie Scott.
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