A federal appeals court has given Con Edison, the electricity provider for most of lower Manhattan, permission to move forward with its lawsuit against the Port Authority of New York for allowing diesel fuel tanks to sit beneath one of the World Trade Center buildings that collapsed after the September 11, 2001, attacks.

 

In its $315 million civil action, Con Edison’s insurer, Aegis Insurance, claims that the existence of the tanks below the 7 World Trade Center fueled the fire that destroyed an electrical substation and, ultimately, the building itself. The utility signed a 50-year lease with the Port Authority in 1968 that allowed for the building of the substation and for the Port Authority to develop atop it, what later became 7WTC, which was completed in 1987.

 

The tanks were installed by the building’s tenants: Salomon Brothers investment bank and New York City’s Office of Emergency Management, which wanted the fuel to supply emergency power.

 

Aegis Insurance argues that the Port Authority should not have allowed the tenants to install the tanks and should be found negligent for having done so. The U.S. Court of Appeals for the Second Circuit reversed a lower court ruling and said that the Port Authority could potentially be held liable for the installation of the fuel tanks.

 -Noel Brinkerhoff, David Wallechinsky

Con Ed May Continue With Sept. 11 Claims (by Santi Suthinithet, Courthouse News Service)

Circuit Revives Negligence Suit in 9/11 Substation Destruction (by Mark Hamblett, New York Law Journal)

Summary Order (Second Circuit Court of Appeals) (pdf)