NY judge refuses to grant lawyers interest on money they borrowed to fund 9/11 litigation

NY judge blocks interest in Sept. 11 litigation

NEW YORK — A judge on Friday barred lawyers representing Sept. 11 responders exposed to World Trade Center dust from billing them $6.1 million in financing fees for the litigation, saying their fees are already “too much.”

The attorneys had argued in federal court in Manhattan that making clients cover interest on loans to pay startup costs for lawsuits was standard practice. But U.S. District Alvin Hellerstein called it “unreasonable” given that the lawyers stand to make a minimum of $150 million in fees on the case.

“In the context of $150 million, I believe you can absorb $6 million,” the judge told them at the end of the hearing.

In parting, he added, “What you’re getting is too much.”

One of the attorneys, William Groner, complained afterward that the judge had ruled against them “for no other reason than it’s 9/11.”

In June, the judge endorsed a settlement with city officials that could pay up to $713 million to about 10,000 police officers, firefighters and construction workers who responded to the World Trade Center after the Sept. 11 attacks. The plaintiffs had complained of breathing and digestive problems, chronic coughing and thousands of other ailments they say were caused by the toxic air at ground zero.

Under the terms of the deal, 95 percent of the workers involved in the case must opt in for it to take effect. Earlier this week, with about 50 percent in so far, a Sept. 30 deadline was extended to Nov. 8.

The plaintiff lawyers borrowed tens of millions of dollars to pay for the litigation and had their clients sign agreements saying they would cover the interest.

On Friday, the lawyers took two law professors to court to tell the judge that the arrangement was legal and ethical. The attorneys also argued they were already making concessions: Under a compromise reached in a revised settlement, they were taking a 25 percent cut of the deal rather than the usual 33 percent.

But the judge wasn’t swayed.

“Beyond legality and beyond ethics, it’s important to have a sense of balance,” the judge said.

The ruling saves each plaintiff $78 to $2,300 in interest.