INSURERS AWARDED $9 BILLION IN DEFAULT JUDGMENT AGAINST AL QAEDA FOR “BUSINESS OR PROPERTY” DAMAGE UNDER ANTI-TERRORISM ACT
Various insurance carriers covering losses from the 9/11 terrorist attacks were collectively awarded treble damages amounting to over $9 billion against the terrorist organization al Qaeda. The carriers had obtained default judgments against al Qaeda and moved under the “business or property” provisions of the Anti-Terrorism Act to assess damages. Adopting the magistrate judge’s report and recommendation, the district judge broadly construed the available damages under the ATA based on similar language in the Clayton Act and civil RICO statute. Based on the insurers’ allegations and affidavits, the court awarded treble damages for claims paid on business interruption, property damage, and other losses resulting directly from the 9/11 attacks. The court denied recovery, subject to reconsideration after submission of additional evidence and briefing, for claim adjustment costs and legal expenses associated with paying claims. The court noted that binding precedent likely limited the insurers’ recoveries to the extent of their subrogation to their insureds’ claims. In re Terrorist Attacks on September 11, 2001, Case No. 03 MDL 1570 (USDC S.D.N.Y. Dec. 16, 2011).
This post written by Michael Wolgin.
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