In re: Sept. 11 Prop. Damage Litig.

10-2970-cv(L) In re: Sept. 11 Prop. Damage Litig. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT — 3 — 4 August Term 2010 — 5 — — 6 — 7 (Argued: March 10, 2011 Decided: April 8, 2011) — 8 — 9 Docket Nos. 10-2970-cv(L), 10-3128-cv(CON), 10-3131-cv(CON), 10 10-3133-cv(CON), 10-3135-cv(CON), 10-3136-cv(CON), 10-3137-cv(CON), 11 10-3139-cv(CON), 10-3140-cv(CON), 10-3141-cv(CON), 10-3143-cv(CON), 12 10-3144-cv(CON), 10-3145-cv(CON), 10-3148-cv(CON), 10-3153-cv(CON), 13 10-3157-cv(CON), 10-3159-cv(CON), 10-3178-cv(CON), 10-3180-cv(CON) — 14 — 15 _____________________________________ — 16 — 17 IN RE: SEPTEMBER 11 18 PROPERTY DAMAGE LITIGATION 19 _____________________________________ — 20 — 21 WORLD TRADE CENTER PROPERTIES LLC; 1 WORLD TRADE CENTER LLC; 2 22 WORLD TRADE CENTER LLC; 3 WORLD TRADE CENTER LLC; 4 WORLD TRADE 23 CENTER LLC; 7 WORLD TRADE COMPANY, L.P., — 24 — 25 Intervenors-Appellants, — 26 — 27 -v.- — 28 — 29 CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON COMPRISING SYNDICATES NO. 30 33, 1003, 2003, 1208, 1243, 0376; GREAT LAKES REINSURANCE (UK), PLC; 31 UNDERWRITER AT LLOYD’S, SYNDICATE NO. 1225; MUNICH-AMERICAN RISK 32 PARTNERS 7244 GMBH; GREATER NEW YORK MUTUAL INSURANCE COMPANY; 33 INSURANCE COMPANY OF GREATER NEW YORK; MUNICH REINSURANCE COM34 PANY UK GENERAL BRANCH; MUENCHENER RUECKVERSICHERUNES35 GESELLSCHAFT; WOBURN INSURANCE, LTD.; GREAT LAKES REINSURANCE U.K. 36 PLC; AMERICAN ALTERNATIVE INSURANCE CORPORATION; THE PRINCETON 37 EXCESS & SURPLUS LINES INSURANCE COMPANY; MUNICH REINSURANCE 38 AMERICA, INC., FORMERLY KNOWN AS AMERICAN RE-INSURANCE COMPANY; 39 COLISEE RE, FORMERLY KNOWN AS AXA RE AND SUCCESSOR TO THE INTERESTS 1 AND LIABILITIES OF SPS REASSURANCE; COLISEE RE CANADIAN BRANCH, 2 FORMERLY KNOWN AS AXA RE CANADIAN BRANCH AND FORMERLY KNOWN AS 3 AXA CORPORATE SOLUTIONS REASSURANCE CANADIAN BRANCH; COLISEE RE 4 MADEIRA BRANCH, FORMERLY KNOWN AS AXA RE MADEIRA BRANCH; PORTMAN 5 INSURANCE LIMITED, FORMERLY KNOWN AS AXA GLOBAL RISKS (UK) LTD. AND 6 SUCCESSOR TO THE INTERESTS AND LIABILITIES OF AXA REINSURANCE UK PLC; 7 AXA CORPORATE SOLUTIONS ASSURANCE UK BRANCH; AXA INSURANCE 8 COMPANY, FORMERLY AXA CS INSURANCE CO.; COLISEUM REINSURANCE 9 COMPANY, FORMERLY AXA CS REINSURANCE CO. US; AXA VERSICHERUNG AG; 10 AXA CESSIONS; AXA CORPORATE SOLUTIONS SERVICES UK LTD. AND AXA 11 CORPORATE SOLUTIONS ASSURANCE, FOR ITSELF AND SUCCESSOR TO THE 12 INTERESTS AND LIABILITIES OF AXA CORPORATE SOLUTIONS ASSURANCE 13 CANADIAN BRANCH; AXA ART INSURANCE CORPORATION; PARIS RE ASIA 14 PACIFIC PTE. LTD., FORMERLY KNOWN AS AXA RE ASIA PACIFIC PTE. LTD.; PARIS 15 RE, SUCCESSOR TO THE INTERESTS AND LIABILITIES OF COMPAGNIE GENERALE 16 DE REASSURANCE DE MONTE CARLO; INDUSTRIAL RISK INSURERS AND ITS 17 MEMBERS; AEGIS INSURANCE SERVICES, INC.; LIBERTY INSURANCE UNDERWRIT18 ERS, INC.; NATIONAL UNION INSURANCE COMPANY OF PITTSBURGH; NUCLEAR 19 ELECTRIC INSURANCE LIMITED; CERTAIN UNDERWRITERS AT LLOYD’S COMPRIS20 ING SYNDICATES NO. 1225 AND 1511; CONSOLIDATED EDISON COMPANY OF NEW 21 YORK, INC.; QBE INTERNATIONAL INSURANCE LTD.; CERTAIN UNDERWRITERS AT 22 LLOYD’S LONDON, AS MEMBERS OF SYNDICATES NUMBERED 1212, 1241, 79, 506, 23 AND 2791; ASSURANCES GENERALES DE FRANCE IART; ASSURANCES GENERALES 24 DE FRANCE; ALLIANZ GLOBAL RISKS US INSURANCE COMPANY F/K/A ALLIANZ 25 INSURANCE COMPANY; ALLIANZ INSURANCE COMPANY OF CANADA; ALLIANZ 26 SUISSE VERSICHERUNGS-GESELLSCHAFT; ALLIANZ VERSICHERUNGS27 AKTIENGESELLSCHAFT; FIREMAN’S FUND INSURANCE COMPANY; MAYORE 28 ESTATES, LLC; 80 LAFAYETTE ASSOCIATES, LLC; BARCLEY DWYER CO., INC.; 29 KAROON CAPITAL MANAGEMENT, INC.; N.S. WINDOWS LLC; TOWER COMPUTER 30 SERVICES, INC.; WALL STREET REALTY CAPITAL, INC.; WORLD TRADE FARMERS 31 MARKET, INC.; ADEM ARICI; OMER IPEK; MVN ASSOCIATES, INC.; MARSHA VAN 32 NAME; DANIEL D’AQUILA; FLOYD VAN NAME, — 33 — 34 Plaintiffs-Appellees, — 35 — 36 AMERICAN AIRLINES, INC.; AMR CORPORATION; UNITED AIR LINES, INC.; UAL 37 CORPORATION; US AIRWAYS, INC.; US AIRWAYS GROUP, INC.; COLGAN AIR, INC.; 38 GLOBE AVIATION SERVICES CORPORATION; GLOBE AIRPORT SECURITY SERVICES, 39 INC.; HUNTLEIGH USA CORPORATION; ICTS INTERNATIONAL N.V.; THE BOEING 40 COMPANY; MASSACHUSETTS PORT AUTHORITY; BURNS INTERNATIONAL SECU2 1 RITY SERVICES COMPANY, LLC, FORMERLY KNOWN AS BURNS INTERNATIONAL 2 SECURITY SERVICES CORPORATION; BURNS INTERNATIONAL SERVICES COM3 PANY, LLC, FORMERLY KNOWN AS BURNS INTERNATIONAL SERVICES CORPORA4 TION; PINKERTON’S LLC, FORMERLY KNOWN AS PINKERTON’S INC.; 5 SECURITAS AB, — 6 — 7 Defendants-Appellees. — 8 — 9 _____________________________________ — 10 — 11 Before: B.D. PARKER, LIVINGSTON, and LYNCH, Circuit Judges. 12 Intervenors-Appellants World Trade Center Properties LLC, 1 World 13 Trade Center LLC, 2 World Trade Center LLC, 3 World Trade Center LLC, 4 14 World Trade Center LLC, and 7 World Trade Company, L.P. (collectively “WTCP 15 Plaintiffs”) appeal from a final Order of the United States District Court for the 16 Southern District of New York (Alvin K. Hellerstein, District Judge) granting 17 Plaintiffs-Appellees’ (collectively “Settling Plaintiffs”) and Defendants-Appellees’ 18 (collectively “Aviation Defendants”) joint motion for orders approving their 19 Settlement Agreement and Mutual Release of Claims. We hold that the Air 20 Transportation Safety and System Stabilization Act of 2001 (“ATSSSA”), Pub. 21 L. No. 107-42, 115 Stat. 230 (2001) (codified as amended at 49 U.S.C. § 40101 , 22 note), does not preempt New York State’s “first-come, first-served” settlement 23 rule, and that the proposed settlement payments reduce each contributing 24 Aviation Defendants’ remaining liability pursuant to the liability limits defined 25 in ATSSSA. We also conclude that the district court did not abuse its discretion — 3 — 1 in finding that the Settling Plaintiffs and Aviation Defendants entered into their 2 settlement agreement in good faith. Accordingly, we affirm the district court’s 3 approval of the settlement. 4 AFFIRMED. — 5 — 6 CATHI HESSION (Richard Williamson, on the 7 brief), Flemming Zulack Williamson Zauderer 8 LLP, New York, New York, for Intervenors9 Appellants. — 10 — 11 GREGORY P. JOSEPH (Douglas J. Pepe, on the 12 brief), Gregory P. Joseph Law Offices LLC, New 13 York, New York, for Plaintiffs-Appellees. — 14 — 15 ROGER E. PODESTA, Debevoise and Plimpton LLP; 16 Desmond T. Barry, Jr., Condon & Forsyth LLP, 17 New York, New York, for Defendants-Appellees. — 18 — — 19 — 20 DEBRA ANN LIVINGSTON, Circuit Judge: 21 Intervenors-Appellants World Trade Center Properties LLC, 1 World 22 Trade Center LLC, 2 World Trade Center LLC, 3 World Trade Center LLC, 4 23 World Trade Center LLC, and 7 World Trade Company, L.P. (collectively “WTCP 24 Plaintiffs”) appeal from a final Order of the United States District Court for the 25 Southern District of New York (Alvin K. Hellerstein, District Judge) granting 26 Plaintiffs-Appellees’ (collectively “Settling Plaintiffs”) and Defendants-Appellees’ 27 (collectively “Aviation Defendants”) joint motion for orders approving their 28 Settlement Agreement and Mutual Release of Claims, dated February 23, 2010. — 4 — 1 The district court also ordered all amounts paid pursuant to the settlement 2 agreement to be credited to the contributing Aviation Defendants’ respective 3 liability ceilings under § 408(a)(1) of the Air Transportation Safety and System 4 Stabilization Act of 2001 (“ATSSSA”), Pub. L. No. 107-42, 115 Stat. 230 (2001) 5 (codified as amended at 49 U.S.C. § 40101 , note). It further found that 6 Defendant-Appellee Huntleigh USA Corp.’s (“Huntleigh”) insurers will exhaust 7 the limits of Huntleigh’s liability insurance coverage by making payments 8 pursuant to the settlement agreement. 9 The WTCP Plaintiffs argue that the district court’s application of New 10 York state settlement rules was contrary to, and thus preempted by, ATSSSA. 11 They also contend that the court failed to make a proper evaluation of the 12 fairness of the settlement agreement, and that the court erred in crediting the 13 proposed settlement payments to the contributing Aviation Defendants’ 14 respective liability limits under ATSSSA. We hold that ATSSSA does not 15 preempt New York State’s “first-come, first-served” settlement rule, and that the 16 proposed settlement payments pursuant to the settlement agreement properly 17 reduce the contributing Aviation Defendants’ remaining liability under 18 ATSSSA’s liability limits. We further conclude that the district court did not 19 abuse its discretion in finding that the Settling Plaintiffs and Aviation 20 Defendants entered into their settlement in good faith. — 5 — 1 BACKGROUND 2 This case concerns the multitude of property damage claims that arose 3 from the terrorist attacks of September 11, 2001, when American Airlines Flight 4 11 and United Air Lines Flight 175 struck Towers One and Two of the World 5 Trade Center. Defendant-Appellee Globe Airport Security Services, Inc. 6 (“Globe”) provided security services for Defendant-Appellee American Airlines, 7 Inc. (“American”) and screened the passengers aboard Flight 11. Huntleigh 8 provided similar services for Defendant-Appellee United Air Lines, Inc. 9 (“United”), and screened the passengers aboard Flight 175. 10 Among the several groups of plaintiffs that filed suit against the Aviation 11 Defendants, the Settling Plaintiffs alleged subrogated and uninsured property 12 damage and business interruption claims. The WTCP Plaintiffs similarly 13 asserted claims, alleging, inter alia, that, but for the negligence of the Aviation 14 Defendants, the terrorists would not have boarded Flights 11 and 175, and the 15 WTCP Plaintiffs’ property would not have been destroyed. After a lengthy 16 period of discovery, the Settling Plaintiffs and Aviation Defendants entered into 17 a mediation process in which retired U.S. District Judge John S. Martin, Jr., 18 served as mediator. The WTCP Plaintiffs, however, did not participate after 19 Judge Martin concluded that their position was so far apart from that of the 20 Aviation Defendants that mediation efforts would be unproductive. — 6 — 1 Towards the end of the mediation proceedings between the Settling 2 Plaintiffs and the Aviation Defendants, which lasted two full weeks, Judge 3 Martin concluded that the two sides remained far apart. He proposed a 4 “mediator’s number” of $1.2 billion to settle all claims. The proposed amount, 5 which Judge Martin believed to represent a reasonable settlement of all of the 6 Settling Plaintiffs’ claims, reflected a 72 percent discount from the Settling 7 Plaintiffs’ total claimed damages of $4.4 billion, and was higher than the last 8 settlement offer by the Aviation Defendants. Both sides accepted Judge Martin’s 9 number and, on February 23, 2010, entered into their Settlement Agreement 10 and Mutual Release of Claims. 11 The settlement resolves 18 of the 21 property damage actions comprising 12 the master calendar for September 11 property damage claims, 21 MC 101.1 13 Under the terms of the agreement, four of the Aviation Defendants are to pay 14 the entire settlement amount of $1.2 billion. American and Globe will pay 60 15 percent of the settlement, for damages attributed to Flight 11, while United and 16 Huntleigh will pay the remaining 40 percent, for damages attributed to Flight 17 175. Because Huntleigh had a small amount of insurance relative to the other — 1 — Due to the great number of September 11 related lawsuits, the district court consolidated these cases under four master case numbers, which separated the cases by subject matter. In re Sept. 11 Litig., 567 F. Supp. 2d 611, 614 n.3 (S.D.N.Y. 2008). 21 MC 101 encompassed wrongful death, personal injury and property damage lawsuits resulting from the terrorist attacks. Id. — 7 — 1 contributing Aviation Defendants, the agreement further provides that 2 Huntleigh will contribute, and thereby exhaust, its available insurance coverage. 3 In exchange, each Settling Plaintiff is to execute and deliver releases discharging 4 and releasing all Aviation Defendants, as well as the contributing Aviation 5 Defendants’ insurers, from all claims relating to or arising out of the September 6 11 attacks. The agreement is expressly conditioned, in relevant part, upon the 7 district court’s: 1) approving both the settlement and the allocation of payments 8 between the contributing Aviation Defendants as consistent with ATSSSA; 2) 9 concluding that all amounts paid pursuant to the settlement agreement are to 10 be credited against the contributing Aviation Defendants’ respective ATSSSA 11 liability limits; and 3) finding that Huntleigh exhausted its liability limits under 12 ATSSSA. 13 In an Opinion and Order dated July 1, 2010, the district court approved 14 the settlement agreement and ordered all amounts paid pursuant to the 15 settlement agreement to be credited against the liability ceilings of the 16 contributing Aviation Defendants. The court also concluded that payment by 17 Huntleigh’s insurers exhausted the limits of Huntleigh’s liability insurance 18 coverage. On July 23, 2010, the district court issued an order clarifying that its 19 Opinion and Order was final and appealable in each of the settled actions and 20 in the collective 21 MC 101 action. It also granted intervenor status in each of — 8 — 1 the settled actions to the WTCP Plaintiffs. The court directed entry of final 2 judgment pursuant to Fed. R. Civ. P. 54(b). Judgment was entered in the 3 collective 21 MC 101 action on July 23, 2010, and in each of the settled actions 4 on July 29, 2010. The WTCP Plaintiffs timely appealed from the collective 5 action on July 30, 2010, and from each settled action on August 9, 2010. — 6 — 7 DISCUSSION 8 On appeal, the WTCP Plaintiffs contend that the district court erred in 9 three respects. First, the WTCP Plaintiffs argue that the district court’s 10 approval of the settlement pursuant to New York state law was contrary to 11 ATSSSA. Second, they argue that the district court failed to make a proper 12 evaluation of the settlement agreement and its fairness. Third, they contend 13 that the district court erred in crediting the settlement payments to the Aviation 14 Defendants’ ATSSSA liability limits because such payments were not based on 15 these defendants’ “liability.” 16 “Typically, settlement rests solely in the discretion of the parties, and the 17 judicial system plays no role.” In re Masters Mates & Pilots Pension Plan & 18 IRAP Litig., 957 F.2d 1020, 1025 (2d Cir. 1992); see also Fed. R. Civ. P. 19 41(a)(1)(A) (“[T]he plaintiff may dismiss an action without a court order by 20 filing . . . a stipulation of dismissal signed by all parties who have appeared.”). — 9 — 1 In some circumstances, however, “parties are unwilling to drop litigation unless 2 a court invokes its equitable powers to enforce their agreement.” In re Masters, — 3 — 957 F.2d at 1025 ; see also Manual for Complex Litigation (Fourth) § 13.14 4 (2004). We generally review a district court’s approval of a settlement 5 agreement for abuse of discretion. See Neilson v. Colgate-Palmolive Co., 199 — 6 — F.3d 642, 654 (2d Cir. 1999). We review a district court’s factual conclusions 7 under the “clearly erroneous” standard, and its legal conclusions de novo. See 8 Omega Eng’g, Inc. v. Omega, S.A., 432 F.3d 437, 443 (2d Cir. 2005). — 9 — 10 I. Whether the District Court Properly Applied State Law to 11 Approve the Settlement Agreement — 12 — 13 As the district court noted, under New York State law, an insurer has 14 discretion to settle whenever and with whomever it chooses, provided it does not 15 act in bad faith. See Allstate Ins. Co. v. Russell, 788 N.Y.S.2d 401, 402 (N.Y. 16 App. Div. 2d Dep’t 2004). This “‘first in time, first in right’ principle” applies 17 regardless of “whether the priority is by way of judgment or by way of settle18 ment.” David v. Bauman, 196 N.Y.S.2d 746, 748 (N.Y. Sup. Ct. 1960). The 19 WTCP Plaintiffs argue that the district court’s application of this “first-come, 20 first-served” settlement rule was contrary to, and therefore preempted by, 21 ATSSSA for two primary reasons. First, they contend that ATSSSA’s liability — 10 — 1 limits created a “limited fund,” from which they are entitled to a just and fair 2 distribution. Second, they argue that pursuant to ATSSSA’s provisions and its 3 overall statutory scheme, they are entitled to adequate compensation notwith4 standing the statute’s liability limitations. Relying on our prior decision in 5 Canada Life Assurance Co. v. Converium Rückversicherung (Deutschland) AG, — 6 — 335 F.3d 52 (2d Cir. 2003), they assert that they are one of “those injured or 7 killed in the terrorist attacks,” to whom ATSSSA “ensur[ed] . . . adequate 8 compensation.” Id. at 55 . The WTCP Plaintiffs’ contentions lack merit. 9 Section 408(b)(2) of ATSSSA provides that the substantive law for decision 10 in actions arising out of the September 11 terrorist attacks “shall be derived 11 from the law . . . of the State in which the crash occurred unless such law is 12 inconsistent with or preempted by Federal law.” ATSSSA § 408(b)(2). In 13 construing various provisions of ATSSSA, we have recognized that federal law 14 preempts state law pursuant to the Supremacy Clause, U.S. Const. art. VI, cl. 15 2, where, inter alia: 1) Congress preempts state law in express terms (and within 16 its constitutional limits); 2) state law “actually conflicts” with federal law; or 3) 17 state law “stands as an obstacle to the accomplishment and execution of the full 18 purposes and objectives of Congress.” In re WTC Disaster Site, 414 F.3d 352 , 19 371-72 (2d Cir. 2005) (quoting Hillsborough Cnty. v. Automated Med. Labs., Inc., — 20 — 471 U.S. 707, 713 (1985)). If, as here, a statute contains an express preemption — 11 — 1 clause, “‘the task of statutory construction must in the first instance focus on the 2 plain wording of the clause, which necessarily contains the best evidence of 3 Congress’ pre-emptive intent.’” Id. at 372 (quoting CSX Transp., Inc. v. 4 Easterwood, 507 U.S. 658, 664 (1993)). 5 A. Whether ATSSSA’s Liability Limits Create a “Limited Fund” 6 The WTCP Plaintiffs’ claim that ATSSSA created a “limited fund,” 7 preempting New York’s “first-come, first-served” settlement rule, is without 8 merit. In a section entitled “Limitation on liability,” ATSSSA specifies that 9 liability “for all claims, whether for compensatory or punitive damages or for 10 contribution or indemnity,” against the Aviation Defendants “shall not be in an 11 amount greater than the limits of liability insurance coverage maintained by” 12 the Aviation Defendants. ATSSSA § 408(a)(1). We have repeatedly made clear 13 that this provision – far from creating a fund for the payment of claims – instead 14 “caps tort liability stemming from the attacks at ‘the limits of the liability 15 insurance coverage maintained by the [Aviation Defendants].’” Schneider v. 16 Feinberg, 345 F.3d 135, 139 (2d Cir. 2003) (per curiam) (quoting ATSSSA 17 § 408(a)); see also In re WTC Disaster Site, 414 F.3d at 373 (noting that a 18 “principal component[ ]” of ATSSSA was “the limitation of the airlines’ liability 19 for damages sustained as a result of those crashes” (emphasis added)); Canada 20 Life, 335 F.3d at 55 (noting that § 408(a) “limits the liability for the events of — 12 — 1 September 11” of the Aviation Defendants). A primary purpose of ATSSSA, as 2 we have noted, was to “preserve the continued viability of the United States air 3 transportation system from potentially ruinous tort liability in the wake of the 4 attacks.” Schneider, 345 F.3d at 139 (internal quotation marks omitted); see also 5 In re WTC Disaster Site, 414 F.3d at 377 (observing that a “principal goal[ ]” was 6 “to limit the liability of entities that were likely to be sued for injuries suffered 7 in connection with the crashes”); Canada Life, 335 F.3d at 55 (finding that a 8 “general purpose” of ATSSSA was “to protect the airline industry and other 9 potentially liable entities from financially fatal liabilities”). 10 Nothing in ATSSSA’s text suggests that Congress intended to create a 11 “limited fund” from which plaintiffs bringing a federal cause of action under 12 ATSSSA against the Aviation Defendants are entitled to an equitable share. To 13 the contrary, various provisions of the statute concern the administration of, and 14 eligibility regarding, a Victim Compensation Fund for individuals willing to 15 waive such a cause of action pursuant to § 408(b). See ATSSSA §§ 404-06. And 16 Congress provided explicitly for the treatment of certain other claims involving 17 other defendants, specifying, for instance, the funds from which debris removal 18 claims were to be paid, and the manner in which settlements or judgments were 19 to be treated. See ATSSSA § 408(a)(5) (“Payments to plaintiffs who obtain a 20 settlement or judgment with respect to a claim or action to which paragraph (4) — 13 — 1 [(debris removal actions)] applies, shall be paid solely from the following funds 2 in the following order.”). Had Congress intended to create a “limited fund” for 3 those plaintiffs pursuing an ATSSSA cause of action against the Aviation 4 Defendants, and to constrain the manner in which settlements could be made, 5 it would have done so in far more explicit terms. 6 B. Whether ATSSSA’s Purpose and Statutory Scheme Preempt New 7 York’s “First-Come, First-Served” Settlement Rule — 8 — 9 The WTCP Plaintiffs next contend that this Court in Canada Life 10 concluded that Congress intended to ensure that ATSSSA’s liability limit 11 preserved the ability of any claimant to recover a damages award, requiring, 12 here, the preemption of New York’s “first-come, first served” settlement rule. We 13 disagree. Canada Life discussed Congress’s decision to require a single forum 14 for all actions, and found that the goal of requiring a single forum was to “ensure 15 consistency and efficiency in resolving the many expected actions arising from 16 the events of September 11.” 335 F.3d at 58 . We acknowledged that Congress 17 sought to avoid the undesirable effects of litigation in multiple state and federal 18 fora, and noted that such effects “might include adjudications having a 19 preclusive effect on non-parties or substantially impairing or impeding non20 parties’ abilities to protect their rights.” Id. at 59 (emphasis added). This 21 discussion in Canada Life, however, referred solely to the purposes of ATSSSA’s — 14 — 1 exclusive venue provision. We never suggested there that ATSSSA pursued the 2 goal of avoiding preclusive effects by any means other than requiring an 3 exclusive forum. Canada Life therefore does not support the WTCP Plaintiffs’ 4 argument. 5 We conclude that New York’s “first-come, first-served” rule, as applied by 6 the district court, is neither inconsistent with ATSSSA, nor does it stand as an 7 obstacle to the accomplishment of Congress’s objectives in enacting ATSSSA. 8 Moreover, because neither ATSSSA nor other federal law controls the approval 9 of settlements in actions commenced under § 408(b)(1), state law settlement 10 rules apply to this case. See id. § 408(b)(2). The district court therefore properly 11 applied state law settlement rules to the settlement agreement. — 12 — 13 II. Whether the District Court Failed to Make a Proper Evaluation of 14 the Settlement — 15 — 16 The WTCP Plaintiffs next argue that the district court failed to make a 17 proper evaluation of the settlement and its relative fairness. Under New York 18 law, an insurer “has no duty to pay out claims ratably and/or consolidate them,” 19 so long as it does not act in bad faith. Allstate Ins. Co., 788 N.Y.S.2d at 402 20 (citing Duprey v. Sec. Mut. Cas. Co., 256 N.Y.S.2d 987, 989 (N.Y. App. Div. 3d 21 Dep’t 1965)). An insurer may therefore “settle with less than all of the claimants — 15 — 1 under a particular policy even if such settlement exhausts the policy proceeds.” 2 STV Grp., Inc. v. Am. Cont’l Props., Inc., 650 N.Y.S.2d 204, 205 (N.Y. App. Div. 3 1st Dep’t 1996). Such settlements are not “voluntary” or “additional insurance,” 4 but rather “reduc[e] the liability remaining under the policy.” Duprey, 256 5 N.Y.S.2d at 989. This has long been the rule across several jurisdictions.2 See — 6 — 70 A.L.R.2d 416 § 2a (2008); 46A C.J.S. Insurance § 2318 (2010). 7 The WTCP Plaintiffs have presented no evidence of the bad faith 8 necessary to draw into question the settlement in this case.3 The settling 9 parties’ mediator, Judge Martin, attested that the settling parties “hotly 10 contested each other’s claims both as to legal liability and damages,” and that 11 they made detailed presentations on their differing positions. Decl. of John S. 12 Martin, Jr. ¶ 7. He has affirmed that there was no indication during the 13 mediation process that any of the parties softened its position on a proper 14 settlement for interests other than its own. Id. ¶ 8. Judge Martin has also — 2 — E.g., Travelers Indem. Co. v. Citgo Petroleum Corp., 166 F.3d 761, 764-65 (5th Cir. 1999); Hartford Cas. Ins. Co. v. Dodd, 416 F. Supp. 1216, 1219 (D. Md. 1976); Allstate Ins. Co. v. Evans, 409 S.E.2d 273, 274 (Ga. App. 1991); Alford v. Textile Ins. Co., 103 S.E.2d 8, 13 (N.C. 1958); Bennett v. Conrady, 180 Kan. 485, 491 (1957). — 3 — Although they argued below that the settlement was the result of secrecy and collusion, the WTCP Plaintiffs have not raised this argument on appeal. It is therefore waived. See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998) (“Issues not sufficiently argued in the briefs are considered waived and normally will not be addressed on appeal.”). — 16 — 1 stated that the settlement agreement was reached “only after extensive arms2 length and good-faith negotiations among the parties and was not intended to 3 prejudice the rights of any other party.” Id. ¶ 10. In addition, the $1.2 billion 4 settlement amount was proposed by Judge Martin, represented a 72 percent 5 discount from the Settling Plaintiffs’ total claimed damages of $4.4 billion, and 6 was higher than the last settlement offer by the Aviation Defendants. 7 The WTCP Plaintiffs argue that the settlement is improper because it is 8 a lump sum applicable to all of the Settling Plaintiffs’ claims, and is not based 9 on a claim-by-claim assessment of potential liability. Judge Martin explained, 10 however, that while the parties did spend a “substantial” amount of time 11 discussing damages on a claim-by-claim basis, none of these issues could be 12 resolved by the time mediation began. Id. ¶ 12. The settling parties decided 13 that the assessment of damages on an underlying claim-by-claim and defendant14 by-defendant basis “could not have been done in any reasonable amount of time 15 and without substantial cost.” Id. Instead, both parties independently 16 concluded that damages should be allocated approximately 60 percent to Flight 17 11, and 40 percent to Flight 175. The 60/40 allocation resulted from each 18 settling party deeming Flight 11 responsible for the destruction of Tower Seven 19 – an assessment of responsibility that the WTCP Plaintiffs themselves assert in 20 their complaint. — 17 — 1 The WTCP Plaintiffs also contend that the settlement is improper because 2 it releases all Aviation Defendants from liability when only four of them are 3 responsible for paying the settlement amount. However, the settling parties 4 articulated their reasons for limiting the settlement contributors to four of the 5 Aviation Defendants. The Aviation Defendants believed that adding other 6 defendants and insurers would increase plaintiffs’ settlement demands and 7 further complicate negotiations without reducing payment by the contributing 8 Aviation Defendants’ insurers. Further, they believed that the claims against 9 the other Aviation Defendants were weaker than those against the two airlines 10 and their checkpoint security companies. The Aviation Defendants were also 11 concerned about setting an undesirable precedent for future disasters if non12 carrier airlines (which might in the future include American and United) 13 contributed to the settlement. In addition, the Aviation Defendants contributing 14 to the settlement did not want to face potential indemnification claims by other 15 Aviation Defendants not released. Finally, the contributing Aviation Defen16 dants’ insurers sought to avoid the costs of continued discovery of their four 17 insureds if the other Aviation Defendants were not released. 18 In sum, we agree with the district court that the settling parties entered 19 into their settlement agreement in good faith. We therefore conclude that the 20 district court did not abuse its discretion in approving the settlement agreement. — 18 — 1 III. Whether the Proposed Settlement Payments Count Towards the 2 Aviation Defendants’ Liability Limits — 3 — 4 The WTCP Plaintiffs finally argue that the district court erred in crediting 5 the settlement payments against the contributing Aviation Defendants’ 6 respective liability limits. They contend that ATSSSA’s limitation only applies 7 to payments for “liability,” and that the settlement payments here should not 8 count because they were not determined on the basis of the Aviation Defendants’ 9 liability. We are not persuaded. 10 When interpreting a statute, we must give terms their ordinary, common 11 meaning and read them in their appropriate context. See Bilski v. Kappos, 130 12 S. Ct. 3218 , 3226 (2010) (“[I]n all statutory construction, unless otherwise 13 defined, words will be interpreted as taking their ordinary, contemporary, 14 common meaning.” (internal quotation marks and alteration omitted)); see also 15 Torraco v. Port Auth. of N.Y. & N.J., 615 F.3d 129 , 142 (2d Cir. 2010) (“In the 16 usual case, if the words of a statute are unambiguous, judicial inquiry should 17 end, and the law is interpreted according to the plain meaning of its words.” 18 (internal quotation marks omitted)). The “meaning of a word [or phrase] cannot 19 be determined in isolation, but must be drawn from the context in which it is 20 used.” Strom v. Goldman, Sachs & Co., 202 F.3d 138, 146 (2d Cir. 1999) 21 (quoting Deal v. United States, 508 U.S. 129, 132 (1993)). — 19 — 1 ATSSSA states in relevant part, “liability for all claims . . . shall not be in 2 an amount greater than the limits of liability insurance coverage maintained by 3 [an Aviation Defendant].” ATSSSA § 408(a)(1) (emphasis added). “Liability,” 4 meanwhile, is defined as either: 1) “[t]he quality or state of being legally 5 obligated or accountable”; or 2) “[a] financial or pecuniary obligation.” Black’s 6 Law Dictionary 997 (9th ed. 2009). Here, reading the term in context, it is clear 7 that “liability” refers to a “financial or pecuniary obligation” that can arise 8 through the settlement of claims. This reading of “liability” in § 408(a)(1) 9 accords with the common understanding of “liability insurance,” which 10 commonly provides for an insured’s claim to arise “once the insured’s [legal 11 obligation] to a third party has been asserted.” Black’s Law Dictionary 873 (9th 12 ed. 2009) (emphasis added); see also 15 Holmes’ Appleman on Insurance § 111.1 13 (2d ed. 2000) (“[L]iability insurance protects the insured against damages which 14 he may be liable to pay to third parties arising out of the insured’s conduct.” 15 (emphasis added)). Settlements, in turn, “reduc[e] the liability remaining under 16 the policy.” Duprey, 256 N.Y.S.2d at 989 (emphasis added). 17 This reading also coheres with other provisions of ATSSSA Title IV – 18 namely § 408(a)(4), which uses similar language to limit the “liability” of certain 19 defendants for debris removal claims. While paragraph (4) specifies the limits 20 of “liability” for such entities, paragraph (5) specifies a priority of payments for — 20 — 1 plaintiffs who obtain “a settlement or judgment” with respect to “a claim or action 2 to which paragraph (4) applies.” ATSSSA § 408(a)(5) (emphasis added). If 3 “liability,” as used in § 408(a)(4), referred only to payments for legally 4 adjudicated obligations, paragraph (5) would be rendered meaningless, and the 5 word “settlement” reduced to surplusage, since there could be no 6 “settlement . . . to which paragraph (4) applies” under the WTCP Plaintiffs’ 7 reading. It thus makes better sense to read “liability” to include the settlement 8 payments made here. The district court therefore did not abuse its discretion or 9 commit an error of law in crediting the settlement payments against the 10 contributing Aviation Defendants’ limits of liability. — 11 — 12 CONCLUSION 13 We have considered the parties’ remaining arguments and find them to be 14 moot or without merit. For the foregoing reasons, the judgment of the district 15 court is AFFIRMED. — 21 —