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Developer seeks dismissal of airline's World Trade Center defense

World Trade Center developer Larry Silverstein speaks at an event to update the public on the pace of development at the site in New York Se
World Trade Center developer Larry Silverstein speaks at an event to update the public on the pace of development at the site in New York Se

By Bernard Vaughan

NEW YORK (Reuters) - The leaseholder of the World Trade Center properties is asking a U.S. federal judge to reject arguments that American Airlines is not liable for damages stemming from the September 11, 2001 hijackings because the attacks were an act of war.

Larry Silverstein filed court papers Wednesday asking U.S. District Judge Alvin Hellerstein in Manhattan to dismiss that line of defense by the airline and its parent, AMR Corp, in the developer's long-running negligence lawsuit against them.

Silverstein has sought to hold American and United Airlines, now United Continental Holdings Inc, responsible for damages from the 2001 attacks for allegedly failing to provide adequate airport and airline security.

The request comes ahead of a ruling by the judge in a separate case to determine whether an "act of war" clause of a federal statute provides a defense to liability claims. If Hellerstein were to rule that defense applied, it potentially could bolster the airlines' defense against Silverstein.

The hijackings killed more than 3,000 people in New York, at the Pentagon outside Washington, D.C., and in Pennsylvania. The case is one of the few remaining lawsuits arising from the attacks. Hellerstein has presided over most of them.

In the new court papers, Silverstein contends AMR and American Airlines should be stopped from the "act of war" defense because the airline and its insurers "repeatedly and explicitly promised Congress, regulators and the American people that they would not use act of war to avoid paying claims" after the attacks.

American Airlines has offered several defenses in the Silverstein case, including that the developer's "alleged damages were caused by an act of war," according to a 2008 court filing by the airline.

In the same court filing, the airline also said it was in compliance with federal safety regulations, which precludes a finding of liability against it; that the alleged damages were caused by the negligence or intentional misconduct of parties for whom it is not responsible; and that neither American nor its parent caused the alleged damages.

"This motion by the Silverstein interests has no factual or legal support," American Airlines spokesman Sean Collins said in a statement. "American Airlines has defended itself with all defenses available at law against the baseless attempt by the Silverstein entities to hold American responsible for the terrorist attacks of September 11."

As part of the September 11 litigation, Hellerstein in November found that United Continental Holdings was not liable for the collapse of 7 World Trade Center because of airport security lapses.

The judge separately has capped potential damages in Silverstein's case against the airlines at $2.8 billion, the amount that the developer paid for the World Trade Center leases. Silverstein already has recovered $4 billion from his insurers.

In the other case involving the "act of war" defense, the 2nd U.S. Circuit Court of Appeals in New York last May asked Hellerstein to determine whether cleanup of asbestos and other contaminants is subject to "an act of war" defense under a 1980 federal environmental statute known as the Comprehensive Environmental Response, Compensation, and Liability Act.

That lawsuit pits property owner Cedar & Washington Associates LLC against the Port Authority of New York and New Jersey. Cedar & Washington is seeking costs for ridding a downtown Manhattan apartment building of ground-up concrete, asbestos and other particles following the attacks.

On February 11, the appeals court suggested it might take up the case again if Hellerstein has not issued a decision in 30 days.

Attorneys for Silverstein and American Airlines declined to comment.

The cases are World Trade Center Properties LLC, et al. v. United Airlines Inc; World Trade Center Properties LLC, et al. V. American Airlines Inc, et al, v. American Airlines Inc et all, U.S. District Court, Southern District of New York, Nos 08-3719 and 08-3722.

(Reporting By Bernard Vaughan; Editing by Martha Graybow and Nick Zieminski)

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